cost basis on noncovered stock

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my name
Posts: 542
Joined: Sun Dec 23, 2007 4:28 pm
Location: NJ

cost basis on noncovered stock

Post by my name » Tue Feb 13, 2018 7:07 pm

I sold my bank stock at Vanguard in 2017. The Vanguard tax form does provide an unreported cost basis for noncovered transactions.

Question - The stock was sold as FIFO, but I sold it all. Is the share price for each transaction using the average price?

If so, as there are not too many rows, does it make sense to lookup the actual share price for each transaction and calculate the real basis? And compare to see which is to my advantage for basis?

livesoft
Posts: 61944
Joined: Thu Mar 01, 2007 8:00 pm

Re: cost basis on noncovered stock

Post by livesoft » Tue Feb 13, 2018 7:13 pm

Generally for stocks you cannot use average basis because that is for mutual funds (and I learned from you for DRIPs?). I would add up all the amounts you paid for buying shares and that would be the cost basis. Probably most shares will be long-term held, but some purchased in the year before you sold because of reinvesting dividends will be short-term. I think they will have a different cost-basis per share, so using the actual dollar amount for each lot is what I would use.

One doesn't actually report the share price to the IRS on their tax return. One reports the dollar amount paid. For instance, if I bought 10.212 shares for $89.24 back in 2007, then I would report $89.24 for those shares (or add $89.24 to the long-term cost basis).
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my name
Posts: 542
Joined: Sun Dec 23, 2007 4:28 pm
Location: NJ

Re: cost basis on noncovered stock

Post by my name » Tue Feb 13, 2018 7:16 pm

Thank you !

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