Chase YouInvest cost basis method

[assyadh]

Hi everyone,

I could not find any info on supported cost basis methods on Chase YouInvest taxable accounts?

I am thinking about moving everything over there but having a specific lot tax basis supported is critical for me for tax loss harvesting purposes.

Can someone here, who is a client of YouInvest check the supported cost basis methods?

Thanks!

[Sopa Conleche]

You can select specific tax lots in You Invest. I've included a screenshot of their UI for it but I've not actually used tax lot selection myself yet.

https://www.dropbox.com/s/nwp5tonkewclw ... 8.png?dl=0

[assyadh]

Thank you!!! Looks like SpecID is supported

[assyadh]

Hey Sopa Conleche,

I couldn't find the tax lot selection screen in YouInvest.

Would you mind sharing the location of the screen?

I'm doing a test with two small tax lots atm.

Thanks.

[sgboggle]

You can get to that "Tax lot selection" screen when entering a sell order. After you enter a number in the Quantity field of your sell order, text will appear at the bottom of the page saying "We'll sell tax lots using the default account method of first in first out, or you can choose specific lots", with a link that opens the Tax lot selection screen.

An annoying/confusing thing is that on the Positions page, when I expand an item and view the tax lots, it shows an average cost (and calculates the gain/loss based on that average cost). It has footnote A: "An "A" in the Cost field denotes that the security is held at Average cost." (At least, for some ETFs.)

[isaacco]

Bad news. They do Average Cost basis for all account types and there's no way to solve it. I've been back and forth with them for over a week since it is happening in my Taxable account and no way o harvest. Over several calls I get dodgy answers like "The ETF provider doesn't allow Specific ID" - what a joke!!! EVen worse, some had no idea about cost basis methods!!!

Sopa Conleche

You can select specific tax lots in You Invest. I've included a screenshot of their UI for it but I've not actually used tax lot selection myself yet.

https://www.dropbox.com/s/nwp5tonkewclw ... 8.png?dl=0

Sopa - I was hoping your screenshot was specific ID so I did the math. For each lot, multiply your "quantity" and "unit cost" - they do not equal the values in the "Cost" columns.

SO to validate they did average cost, do the following:
1. QUANTITY - Add up all your shares = 56
2. TOTAL COST - For each lot, multiply the "quantity" and "unit cost" and then add these real costs up = $5912.72
3. AVERAGE COST PER SHARE - Divide quantity and total cost = $105.58
4. Now per lot multiply, multiply the shares by this average cost per share

Now you see what they did? Your gains/losses are way off.

Also check your transaction history to see how the transaction costs are not matching what they show as "Cost" column in the tax lots. However, the calc I provided in line #2 does match what is in the transactions.

Every brokerage (Fidelity, Vanguard, Schwab, etc. default to Spec ID and allow you to change it. You Invest is trash for taxable accounts. The customer service, operations, technology and advisers I talked with had no clue it was happening, how to fix it, how to change it, etc.

I was hoping this thread was an answer to my problems, but seems we're all screwed in the same boat from these idiots.

Going to have one last chat face-to-face with these clowns this week and if they dont change it retroactively, I'm pulling all my money out and not paying them a penny in fees for closing the account. Maybe a class action would help.

[arf30]

I asked a banker about SpecId support a few months back and was told it would be added in time - it's basically a brand new product right now.

[SlowMovingInvestor]

I am willing to cut You Invest a fair amount of slack -- it is a brand new platform (although I hope they share the same back end as JP Morgan's Investment accounts).

I signed up for the Sapphire Bonus, fully anticipating it'll take them a while to get the kinks worked out. That's why I am sticking with MM funds for now, and they have VG's MM funds available -- I don't think any other discount broker does.

[isaacco]

I asked a banker about SpecId support a few months back and was told it would be added in time - it's basically a brand new product right now.

See if they told me that, it would be understandable... but instead I received tooooo many dodgy answers. Also, I am not willing to take on a tax bill that may be greater than the value I saved from free trades. Had a chat with a CPC banker today and he also said its for novices who dont care to much about that and it was a bit too premature to release as a lot of clients complaining about that.

The cost basis will get worse and worse for tax impacts on rebalancing for everyone, as time progresses. Overall, you are paying the taxman while saving on commissions which is going to be a huge loss. I would rather pay $2.99 per trade if this was fixed.

Had another chat with JPMS specialist and basically, the system is fundamentally only supposed average cost ETFs and treat them like mutual funds and it is what it is and it will not change. So whoever has ETFs is skewed. Finally an honest answer!

Just a bit devastated as I didn't expect Chase to do this. I'm just going to cut the check and exit You Invest to Fidelity and maybe VG,

Hope this helps.

[sgboggle]

The "Average cost" appears to not apply to all ETFs (though maybe it applies to most of the ones that people care about). It's weird that even ETFs in the same family are treated differently: SHV and ICSH are both ETFs from iShares; in the Positions view, SHV shows "A" (Average cost), but ICSH doesn't.

For the ETFs with "Average cost" basis, what will happen if I transfer them to another brokerage? Will the destination brokerage get the actual cost basis for each tax lot, or the average cost basis?

[isaacco]

The "Average cost" appears to not apply to all ETFs (though maybe it applies to most of the ones that people care about). It's weird that even ETFs in the same family are treated differently: SHV and ICSH are both ETFs from iShares; in the Positions view, SHV shows "A" (Average cost), but ICSH doesn't.

For the ETFs with "Average cost" basis, what will happen if I transfer them to another brokerage? Will the destination brokerage get the actual cost basis for each tax lot, or the average cost basis?

I already started the talks today to move my money out. Fidelity and Vanguard said they will have to provide the full ledger of transactions and lots if you transfer securities (not if you liquidate positions and transfer the cash). Vanguard did say they may not receive details for retirement accounts, but it is a must for taxable accounts. Turns out Vanguard also allows iShares and thousands of other ETFs to trade for free. Both company do not charge any fees for incoming securities transfers or entire account transfers.

Fidelity covers transfer fees charged by the previous brokerage while vanguard does not (Vanguard just adds those charges to your settlement account as a negative balance).

Hope this helps.

[G-Force]

I'm confused here. If you can sell specific shares (which seems to be available now as a feature) to minimize taxes, wouldn't the gains/losses still be reported correctly for tax purposes? What does 'held at average cost' mean and why does it matter?

[sgboggle]

I'm confused here. If you can sell specific shares (which seems to be available now as a feature) to minimize taxes, wouldn't the gains/losses still be reported correctly for tax purposes?

I think the issue is that even if you specify the tax lots to sell, the cost basis for each tax lot would be an average of all the tax lots instead of the actual cost basis. So, selecting the tax lot might still help you pick long term vs short term, but the cost basis being average might prevent you from reporting a loss for tax purposes even though it was a loss if looking at the actual cost.

[sgboggle]

I sent a message to Chase about this and got the following positive reply about changing the cost basis method (though I haven't tried it yet):

"The Cost basis system retains both original and average cost but will default to average cost. To update we require a signed and dated Letter of Instruction requesting the change in cost calculation. This letter can be signed, dated, and uploaded in reply to this message. Once received we will review and if in good order will make the adjustment for you."

[isaacco]

Funny how I was never given this option with all the folks I messaged and talked to over the phone. The regular JPMS brokerage account (not You Invest) has a form which you can fill out to have this done, which I brought up, and was told its not something they can flick on or off.

Nonetheless, I already kicked off the transfer of my whole account to Fidelity but if what they told you does actually work, I might consider transfering my account back. I am very highly skeptical about this being resolved anytime soon, since I told them I will need to transfer my account out and they had no come back to stop that.

Hope this works - let me know when/if it kicks in, if you don't mind.

Best of luck and godspeed, my friend.

[isaacco]

I'm confused here. If you can sell specific shares (which seems to be available now as a feature) to minimize taxes, wouldn't the gains/losses still be reported correctly for tax purposes?

I think the issue is that even if you specify the tax lots to sell, the cost basis for each tax lot would be an average of all the tax lots instead of the actual cost basis. So, selecting the tax lot might still help you pick long term vs short term, but the cost basis being average might prevent you from reporting a loss for tax purposes even though it was a loss if looking at the actual cost.

You're right - you may sell a lot as a profit and pay taxes but in reality it should have been written off as a loss. Totally counterproductive to a having a taxable account.