Vanguard lists my cost-basis (cost per share) the same for all lots

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dancecore
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Joined: Tue Jan 23, 2018 7:56 pm

Vanguard lists my cost-basis (cost per share) the same for all lots

Post by dancecore »

I just sold some shares in a Vanguard mutual fund this morning, using the SpecID cost-basis method. I noticed (but not until after the transaction) that the cost-basis information Vanguard shows me doesn't make sense to me. All the lots show exactly the same cost per share, even though they are spread out over a period of years. For example, on 07/29/2016, I reinvested a dividend of $115.24 to purchase 10.3450 shares at $11.14/share (according to my transaction history). However, on the cost-basis page, this is reported as a lot of 10.3450 shares with cost per share of $10.85 for a total cost of $112.21. Every single other lot is also reported as have a cost per share of $10.85 (except for the non-covered shared purchased before 2012, which show a different cost/share).

Am I misunderstanding the way that cost-basis works or is this Vanguard's mistake?

If it's their mistake, is there any urgency in getting it corrected?
donoharm
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Re: Vanguard lists my cost-basis (cost per share) the same for all lots

Post by donoharm »

This is Vanguard's error. I had it happen with 1 of 3 mutual funds I own in which all were specified as specific ID method, but 1 fund had each lot at average cost (same price). It must be a recurring glitch in their computer system. Rather than sending them an email to fix the problem, you can change the cost basis selection to another method and then change it back to specific ID. This worked for me. It will take a day or so to reset to actual specific ID cost for each lot.
blackburnian
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Re: Vanguard lists my cost-basis (cost per share) the same for all lots

Post by blackburnian »

I had the same problem. Three different lots were listed with the same cost basis, though I had bought them on different dates. I called Vanguard (twice), and eventually they fixed it. It took about 4 weeks. Vanguard also fixed incorrect realized loss/gains calculations, but that problem took 3 phone calls, 2 letters, and about 2 months to fix.
Topic Author
dancecore
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Re: Vanguard lists my cost-basis (cost per share) the same for all lots

Post by dancecore »

Thanks to both of you for confirming that I'm not crazy. I'll report back here when this gets resolved.

I actually don't care much about cost-basis in this particular case. The reason I used SpecID was to ensure I wasn't selling anything I had bought in the last 6 months, to avoid any extra hassle at tax time next year. But it looks like I ended up with some extra hassle anyway...
stan1
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Re: Vanguard lists my cost-basis (cost per share) the same for all lots

Post by stan1 »

elrobin wrote: Tue Jan 23, 2018 9:05 pm I had the same problem. Three different lots were listed with the same cost basis, though I had bought them on different dates. I called Vanguard (twice), and eventually they fixed it. It took about 4 weeks. Vanguard also fixed incorrect realized loss/gains calculations, but that problem took 3 phone calls, 2 letters, and about 2 months to fix.
Thank you for holding them accountable for accurate record keeping and meeting the IRS requirement allowing customers to elect their desired cost basis accounting method.
CppCoder
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Re: Vanguard lists my cost-basis (cost per share) the same for all lots

Post by CppCoder »

Ouch! Just to start a flame war, this never happens to me at Fidelity :P. In all seriousness, all software systems have errors. The real question is, given that this is happening to multiple users, why hasn't Vanguard fixed it? :shock: Hopefully, they will soon. This could cause some real inconvenience for people who didn't catch it until the next year filing their taxes.
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triceratop
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Re: Vanguard lists my cost-basis (cost per share) the same for all lots

Post by triceratop »

This happened to me too just before I left Vanguard. The two events were not unrelated. It took a month for them to fix the issue, and their error interfered with my tax gain harvesting season. I recommend that when convenient to look into switching to a brokerage that does not make basic bookkeeping errors with their client's investments.

Meanwhile in another thread someone will post that Vanguard has never made an error for them, so their IT problems are much-exaggerated. :)
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."
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vitaflo
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Re: Vanguard lists my cost-basis (cost per share) the same for all lots

Post by vitaflo »

Have you sold shares using something other than SpecID before? I had this happen to me and talked to Vanguard who said I had made a sale with Avg Cost a while back, thus when you switch to SpecID it will use the Avg Cost value for cost basis for all lots up until you made the switch. This is because there's no way for them to know which lot shares were sold before (under Avg Cost) because they were not sold via lots. Any new purchases moving forward will use the cost basis of the new purchase price however.
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Monster99
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Re: Vanguard lists my cost-basis (cost per share) the same for all lots

Post by Monster99 »

I had this happen also - sold 3 lots with SpecID and the confirmation said ave cost. took one phone call to get straight, but I now have been reluctant to move my 401K to Vanguard if they can't get simple transactions straight. I wonder if they realize how much additional business they lose because of stupid errors. I am considering moving to a brokerage that listens to their clients, as this appears to be a recurring issue they refuse to fix....
FactualFran
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Re: Vanguard lists my cost-basis (cost per share) the same for all lots

Post by FactualFran »

When a change is made from Average Basis (for covered shares) the fact that the lots at the time of the change all retain the previously established average basis per share is part of the IRS regulations.

Vanguard knows which lots were sold because with Average Basis: the shares disposed of are those considered to have been acquired first. When sales are made using Average Basis, the basis includes the cost of shares that were not considered to have been sold. Simply resetting the cost of the shares not considered to have been sold when changing from Average Basis would cause the aggregate basis of the shares to be incorrect.
2015
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Re: Vanguard lists my cost-basis (cost per share) the same for all lots

Post by 2015 »

triceratop wrote: Tue Jan 23, 2018 9:25 pm This happened to me too just before I left Vanguard. The two events were not unrelated. It took a month for them to fix the issue, and their error interfered with my tax gain harvesting season. I recommend that when convenient to look into switching to a brokerage that does not make basic bookkeeping errors with their client's investments.

Meanwhile in another thread someone will post that Vanguard has never made an error for them, so their IT problems are much-exaggerated. :)
That probably would have been me :wink: . I'm beginning to think the reason I may not have ever encountered IT issues with VG is because I'm on the old MF platform??? VG did manage to break their perfect record with me last month with a human error during a roth recharacterization. OTOH, they fixed this within a week and all was well once again in my mutual fund platform world.
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dancecore
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Re: Vanguard lists my cost-basis (cost per share) the same for all lots

Post by dancecore »

FactualFran wrote: Wed Jan 24, 2018 3:56 pm When a change is made from Average Basis (for covered shares) the fact that the lots at the time of the change all retain the previously established average basis per share is part of the IRS regulations.

Vanguard knows which lots were sold because with Average Basis: the shares disposed of are those considered to have been acquired first. When sales are made using Average Basis, the basis includes the cost of shares that were not considered to have been sold. Simply resetting the cost of the shares not considered to have been sold when changing from Average Basis would cause the aggregate basis of the shares to be incorrect.
Thanks for this clarification. However, I'm not sure if this applies to me. I have sold shares in this fund, but the last sale was in 2011. So I haven't sold any covered shares, or had any covered shares factor into an average cost calculation. So I don't see why they would have to adjust the cost-basis of my covered shares. Can anyone confirm this one way or the other?
FactualFran
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Re: Vanguard lists my cost-basis (cost per share) the same for all lots

Post by FactualFran »

dancecore wrote: Thu Jan 25, 2018 2:32 pm Thanks for this clarification. However, I'm not sure if this applies to me. I have sold shares in this fund, but the last sale was in 2011. So I haven't sold any covered shares, or had any covered shares factor into an average cost calculation. So I don't see why they would have to adjust the cost-basis of my covered shares. Can anyone confirm this one way or the other?
There are some complicating details that I have been trying to avoid getting into.

If someone has elected to use Average Basis on an account with covered shares, and later changes the basis method, then the basis of each share immediately after the change is the same as the basis immediately before the change. The shares before the change retain the average basis even if shares have not been sold since Average Basis was elected to be used.

However, if the basis method used for an account has been Average Basis because it is the default used by the broker, then the account owner may revoke the default method and the basis of each share immediately after the revocation is what it would have been if the broker default had not been in effect. The revocation must be done before a sale has been made under the default method. The revocation may have to have been done within a year of the broker default having been applied to the account.

Unless one can convince the broker than a revocation rather than a change has been done, the shares retain the average basis.
Topic Author
dancecore
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Re: Vanguard lists my cost-basis (cost per share) the same for all lots

Post by dancecore »

FactualFran wrote: Thu Jan 25, 2018 3:42 pm There are some complicating details that I have been trying to avoid getting into.

If someone has elected to use Average Basis on an account with covered shares, and later changes the basis method, then the basis of each share immediately after the change is the same as the basis immediately before the change. The shares before the change retain the average basis even if shares have not been sold since Average Basis was elected to be used.

However, if the basis method used for an account has been Average Basis because it is the default used by the broker, then the account owner may revoke the default method and the basis of each share immediately after the revocation is what it would have been if the broker default had not been in effect. The revocation must be done before a sale has been made under the default method. The revocation may have to have been done within a year of the broker default having been applied to the account.

Unless one can convince the broker than a revocation rather than a change has been done, the shares retain the average basis.
Thanks very much for the detailed explanation! I think I now understand why this applies to me.
AviN
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Re: Vanguard lists my cost-basis (cost per share) the same for all lots

Post by AviN »

I had the same problem described in by the OP and followed donoharm's suggestion. It worked! Thanks donoharm. :sharebeer
donoharm wrote: Tue Jan 23, 2018 8:44 pm This is Vanguard's error. I had it happen with 1 of 3 mutual funds I own in which all were specified as specific ID method, but 1 fund had each lot at average cost (same price). It must be a recurring glitch in their computer system. Rather than sending them an email to fix the problem, you can change the cost basis selection to another method and then change it back to specific ID. This worked for me. It will take a day or so to reset to actual specific ID cost for each lot.
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oneleaf
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Re: Vanguard lists my cost-basis (cost per share) the same for all lots

Post by oneleaf »

AviN wrote: Mon Mar 05, 2018 6:03 pm I had the same problem described in by the OP and followed donoharm's suggestion. It worked! Thanks donoharm. :sharebeer
donoharm wrote: Tue Jan 23, 2018 8:44 pm This is Vanguard's error. I had it happen with 1 of 3 mutual funds I own in which all were specified as specific ID method, but 1 fund had each lot at average cost (same price). It must be a recurring glitch in their computer system. Rather than sending them an email to fix the problem, you can change the cost basis selection to another method and then change it back to specific ID. This worked for me. It will take a day or so to reset to actual specific ID cost for each lot.
I just found this happened to one of my funds. It really is a weird glitch.

So I just attempted to change it from SpecID to FIFO then back to SpecID. I assume now I just wait? I don't need to wait a few days after changing to FIFO, and then change back to SpecID, and THEN wait a few more days right?

I do find this very irritating. This was a fund I bought 6 months ago for the first time, and set to SpecID right away. There is no reason for this glitch to have occurred.
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oneleaf
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Re: Vanguard lists my cost-basis (cost per share) the same for all lots

Post by oneleaf »

Vanguard ended up fixing it for me. Only took a couple days. Disappointing that it happened in the first place, but glad to see they can resolve it quickly. I now know I need to keep a spreadsheet of my lots.
samsmith
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Re: Vanguard lists my cost-basis (cost per share) the same for all lots

Post by samsmith »

Just happened to me last week and the disinterest from Vanguard is just amazing.
I switched to SpecID and then waited several days and then sold multiple multiple shares of a fund to TLH.
Checked again several days later and Vanguard had sold the shares based on FIFO (and these were all non-covered shares). So the TLH is all wrong.
Multiple calls to Vanguard. They explain they will have their "cost basis" team review and that team will speak to my Flagship representative (at some unspecified date) who will get back to me (at some unspecified time). But they cant tell when my rep will be in. I ask to speak to the cost-basis team - first they say OK - but then they wont let me. I ask to have someone call me back - so I have some sense that I am not being ignored. First they explain that only my flagship rep can call back - but they don't know when he will be in. Then they agree to call me back last week (after I explain that neither Schwab or Fidelity would tolerate this level of customer) - and then no call back.
So I call back in Friday - I get nowhere with Vanguard. But I realize that since I had reinvested dividends and cap gains, I had a small "wash sale." So I explain to the vanguard flagship phone rep that I need to sell these specific shares and he agrees that he will put the sale through - to ensure it is entered correctly. AND....the Vanguard computer sells the wrong shares based on FIFO.

I have been a Vanguard customer for almost 30 years and was a big advocate most of those years. And I know many of this site's posters continue to believe in the Vanguard ownership structure. But this is the second or third time that Vanguard customer service has come up short fro me. And allowing their computer system to continue making known errors on this cost basis thing is troubling. I am beginning to think Vanguard's ownership structure has resulted in a lack of real over site that would not be tolerated in a company that had a real owner that cared about profit (meaning they wanted and needed to keep customers happy). Put another way, what some believe is a Vanguard advantage, may well in reality be a liability. Sorry about my rant - but I cant make excuses for this company anymore. And my experiences at other discount brokerages like Fidelity, Schwab, TD, etc. have all been far superior to Vanguard recently.
FundSaver
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Re: Vanguard lists my cost-basis (cost per share) the same for all lots

Post by FundSaver »

oneleaf wrote: Mon Dec 10, 2018 12:57 pm
AviN wrote: Mon Mar 05, 2018 6:03 pm I had the same problem described in by the OP and followed donoharm's suggestion. It worked! Thanks donoharm. :sharebeer
donoharm wrote: Tue Jan 23, 2018 8:44 pm This is Vanguard's error. I had it happen with 1 of 3 mutual funds I own in which all were specified as specific ID method, but 1 fund had each lot at average cost (same price). It must be a recurring glitch in their computer system. Rather than sending them an email to fix the problem, you can change the cost basis selection to another method and then change it back to specific ID. This worked for me. It will take a day or so to reset to actual specific ID cost for each lot.
I just found this happened to one of my funds. It really is a weird glitch.

So I just attempted to change it from SpecID to FIFO then back to SpecID. I assume now I just wait? I don't need to wait a few days after changing to FIFO, and then change back to SpecID, and THEN wait a few more days right?

I do find this very irritating. This was a fund I bought 6 months ago for the first time, and set to SpecID right away. There is no reason for this glitch to have occurred.
Did you find that this fixed it, i'm having the same issue now trying the TLH to fund my SEP IRA
FundSaver
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Re: Vanguard lists my cost-basis (cost per share) the same for all lots

Post by FundSaver »

Just an update I had to call in and they acted like it was not possible to correct it. But I pushed them and finally a guy came on the phone and said he'd fix it. Everything now appears to be correct so I can sell lots of my choosing.
anon3838
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Re: Vanguard lists my cost-basis (cost per share) the same for all lots

Post by anon3838 »

I found this post because I was trying to figure out why 12 lots of VTSAX spread out over an 8-month time frame all have the same Cost Basis.

My VTSAX shares are at Fidelity. Do I call Fidelity to get this fixed?

I'm also wondering if this (calculation error?) is affecting the "Personal Returns" calculation. Perhaps my portfolio has not been performing as well as I thought over the last year or so. :annoyed
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