How to update online VG account with cost basis for non-covered shares?

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CoastalWinds
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How to update online VG account with cost basis for non-covered shares?

Post by CoastalWinds » Tue Sep 10, 2019 6:42 pm

Hi BHs

I have several lots of Total US Stock Market (VTSAX) and Developed Markets (VTMGX, formerly Tax-Managed International) that I purchased in my VG taxable account before January 2012. Although VG doesn’t display the cost basis history for these “non-covered shares”, I have kept a detailed spreadsheet of each transaction (and the account statements as backup). I would like to be able to get this information from my spreadsheet into the VG system so I can see the cost basis and gain/loss details by lot all in one location.

I have the following questions related to this:

1. Does VG still have electronic record of the cost basis history of these non-covered shares located somewhere, despite the fact that it doesn’t show on the “Cost Basis /Gains and Losses” tab of the account? Or is my spreadsheet/past statements the only history?

2. For these non-covered shares, how do I go about entering the lot-by-lot breakdown of cost basis and shares info that I have in my spreadsheet into VG’s online system?

3. Several of the VTSAX holdings were previously the investor class (VTSMX), which at one point (prior to Jan. 2012) got converted to Admiral class. The NAVs of these two classes differed slightly at the time of conversion. I’d like to get all of this correctly dealt with when entering in the system (considering I use the SpecID method for selling shares). Please correct me if I’m wrong, but I believe my cost basis ($) for each individual lot stays the same during this conversion while the # of shares associated with each lot changes b/c of the differences in NAV? If so, would I just calculate, for each lot, the new # of shares and enter this along with the original $ cost basis?

Is there anything else I should be aware of, as part of this process?

Thank you!

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Cheez-It Guy
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Re: How to update online VG account with cost basis for non-covered shares?

Post by Cheez-It Guy » Tue Sep 10, 2019 6:52 pm

I have asked Vanguard this specific question several times for myself. Unfortunately for you (and for me), they do not allow this for mutual fund shares acquired before 2012. For individual stocks, they will load cost basis upon request. They still have the transaction history on your mutual funds from which you can reconstitute cost basis. While tedious, the best thing you can do is handle your own cost basis for these pre-2012 shares in a spreadsheet.

When you convert from Investor shares to Admiral, the transaction history should list different numbers of shares before and after the conversion. You can then use this ratio to express older lots as if they were Admiral shares. I’ve been able to get the cost basis in my spreadsheet to exactly match what Vanguard lists for the “Various” lot of non-covered shares, for which they use the average cost basis method. That’s a good check that you’ve got it correct. You report your own cost basis to the IRS on non-covered shares, so you can still use the SpecID method if you choose, as I intend to.

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Re: How to update online VG account with cost basis for non-covered shares?

Post by LadyGeek » Tue Sep 10, 2019 7:07 pm

This thread is now in the Personal Finance (Not Investing) forum (cost basis).
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cognovimus
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Re: How to update online VG account with cost basis for non-covered shares?

Post by cognovimus » Tue Sep 10, 2019 7:19 pm

Had a similar issue with Fidelity last year. If they don't provide it, how does the IRS know if you are reporting correctly?

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Cheez-It Guy
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Re: How to update online VG account with cost basis for non-covered shares?

Post by Cheez-It Guy » Tue Sep 10, 2019 7:21 pm

They don’t. That’s why the rules were changed.

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CoastalWinds
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Re: How to update online VG account with cost basis for non-covered shares?

Post by CoastalWinds » Tue Sep 10, 2019 7:55 pm

Cheez-It Guy wrote:
Tue Sep 10, 2019 7:21 pm
They don’t. That’s why the rules were changed.
Wouldn’t they require some form of documentation (such as past account statement) to confirm the cost basis?

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Cheez-It Guy
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Re: How to update online VG account with cost basis for non-covered shares?

Post by Cheez-It Guy » Tue Sep 10, 2019 7:57 pm

Perhaps if you get audited. The rule change put the record-keeping and reporting burden on the broker rather than the investor. That’s what changed. The broker (Vanguard in the case of the OP) adheres to this, but only for shares acquired after the effective date. Before that, it’s your responsibility. I wish they’d let us load it just so it would be reported to you on your 1099, and to make lot management easier, but unless you have much better luck than me (and I’ve tried more than once hoping they’d change), no dice.

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