Accounting records for your investments

[Texas Proud]

Frankly, I've never had the issue where the IRS challenged the basis of a common security or mutual fund transaction. In most cases, not enough potential revenue to make it worthwhile. But if the sum of your 1099B's reported to the IRS is more than what your reported as proceeds on your tax return, the IRS will catch that, it's a simple computer records match. IRS will send a dunning notice and assume zero basis for the shortfall.

Often we make a good faith effort to establish a date or approximation and use internet tools to determine the approximate basis, and document for our records how we arrived at that figure.

Whole different ball game when come to sale of a share in a business, including publicly traded partnerships. The latter, you can't just take off the brokerage statement but must go through the calculations as outlined in the voluminous K-1 additional info as special treatment of some items in the past will require an adjustment to basis in calculating cap gains/loss.

Just commenting on your last stmt....

Most of the time it is not that big of a deal and trying to track basis for a business or partnership (one where you buy shares, not actually work in) is not worth the trouble....

Unless you are buying big chunks of them.... the difference is usually not that great...

 

[RockyMtn]

Quicken takes care of that with very little work on my part.

+1

 

[Greg V]

That is one reason that I never invested after tax money into a 401(k) or IRA.... I saw only bad options with them...


But, I lie.... I did do it a couple of years ago and did a backdoor ROTH conversion.... it was my only non-ROTH IRA, so it was easy to figure out....

Your point is a good one. I've never been one for excess 401(k) or Roth contributions either. However, in the pre-Roth days of the '80s, depending on your income, it was sometimes a choice between nondeductible traditional IRA contributions or none at all.

 

[MBAustin]

I had to do manual spreadsheet cost basis calculations for some mutual fund investments in taxable accounts that were opened back in the early 1980s. Unfortunately, I also made monthly automatic investments in them for several years, which makes for a VERY long spreadsheet. Fortunately, I had almost all of my year-end statements filed away (thanks, Dad, for showing me the way to do it!) so it was more tedious than difficult.

 

[sengsational]

For cost basis, my mode was to just ignore it until I sold something, and then cobble together a spreadsheet from paper statements as I was preparing my taxes. It made me not want to sell anything, hehe.

As to the routine work of tracking, I wrote a screen scraper application that pulls data (share counts and prices) from my banks, treasury direct, fido, vanguard, work 401(k) all into a single spreadsheet with asset allocation calculations. Even supplies me with graphs with +/- 10% bands around the asset categories . When I was writing the app, I thought I'd use it a lot, but for whatever reason, it's been gathering dust lately. But by doing it this way, I don't have to trust one of those online consolidation apps, yet I still get a unified picture.