Talk:Cost basis methods

I don't have the background to address Epsilon Delta's post in Cost Basis Method. Does anything need to be updated for 2012? Does highest-in-first-out need to be added (grabiner)? Also see livesoft's post.--LadyGeek 19:09, 2 November 2011 (CDT)


 * The page was already edited in 2011 to take the upcoming rules into account, so I believe that all we need to do is clarify how Vanguard will handle things in 2012, and explain that HIFO and other methods are classes of instructions for specific ID. I'm short on time now but will make the edit in a few days.  Grabiner 18:27, 5 November 2011 (CDT)

IRS Publication 564 is no longer on the IRS website (2008 version is available, which is old guidance). I can't find an equivalent publication, only this FAQ: Cost Basis Reporting Overview and FAQs, which is updated for 2012. Can this replace the IRS publication? --LadyGeek 19:23, 10 November 2011 (CST)


 * The mutual fund publication has been incorporated into the IRS Publication 550 Investment Income and Expenses. --Blbarnitz 23:43, 10 November 2011 (CST)

Introduction a bit circular?
Could the introductory paragraphs be rewritten? They seem a bit circular to this reader. After reading the first two paragraphs the purpose of the article doesn't seem clear to this reader. --Peculiar Investor 09:25, 14 February 2014 (CST)

What is the actual rule on cost basis for ETFs?
Vanguard's page on average cost | Average Cost Basis says that Vanguard only allows average cost for ETFs if they are held in a DRIP. The IRS does say that average cost is allowed for regulated investment companies. However, for covered shares, your basis is determined by the brokerage. Thus we should not suggest average cost when it is not possible, either because the IRS forbids it or because brokerages do not support it. What do other brokerages do? If some brokerages support it, we should probably say, "Average cost is allowed for mutual funds. At most brokerages, it is only allowed for stocks and ETFs if they are held in a Dividend Reinvestment Plan.  Some brokerages allow it for all covered ETF shares; Vanguard does not (citation above) but the following brokerages do (their citations)". Grabiner


 * Here's what I found at some brokerage firms:


 * ETF Cost Basis - Fidelity - not that helpful
 * Brokerage Services | Common Cost Basis Questions | T. Rowe Price
 * Cost Basis Accounting and Calculation | T. Rowe Price
 * Cost Basis: Definition, Methods & Reporting | Schwab.com


 * I also found some basic info at FINRA: Cost Basis Basics—Here's What You Need to Know | FINRA.org


 * I agree that we should not impose Vanguard-only restrictions in the wiki page. --LadyGeek 21:07, 4 December 2017 (EST)


 * The new tax law, which is potentially to be signed prior to year end, is also going to change cost basis accounting for individual investors if its current iteration is not changed--Blbarnitz 23:21, 4 December 2017 (EST)


 * Perhaps we should wait until the new tax law has been signed. This page appears in Outline of tax considerations for investors and Category:Tax considerations, which is a list of pages which will need review. --LadyGeek 21:58, 5 December 2017 (EST)