riskaverse said:Always have distributions and dividends paid out. I have some investments that are so contaminated with reinvestments, splits, conversions to other stocks etc., that I'm afraid to sell them, knowing that I'll be unable to calculate an accurate cost basis.
riskaverse said:Always have distributions and dividends paid out. I have some investments that are so contaminated with reinvestments, splits, conversions to other stocks etc., that I'm afraid to sell them, knowing that I'll be unable to calculate an accurate cost basis.
wallygator69 said:Huh? If you hold stocks or mutual funds longer than a year why does it matter. I thought long term cap gains were now taxed at 15%%
If not I am in a pickle.
Thanks,
Wally
brewer12345 said:Its not the tax rate we are afraid of. It is trying to figure out what you paid for the whole mess so that you know what dollar amount to apply the rate to.
grumpy said:. . . And the error is as likely to be in your favor as in Uncle Sam's. . . .
grumpy said:Do you guys really think the IRS is going to waste its time trying to check your cost basis calculations unless a WHOLE LOT of $'s are involved?.....Is it worth the time of an IRS auditor to dig into this? I don't think so. I think you all are worrying about something very minor and very unlikely.
audreyh1 said:Personally, for my overvalued funds (according to my asset allocation model) I have distributions sent to a mmf. This lets me rebalance a bit while I pay my taxes. The undervalued funds - I reinvest the distributions.
2B said:I don't think you've had much experience with the IRS.
2B said:Several people said they had an "average price." I don't have any experience with the IRS on that. Schedule D is very explicit at listing the dates and dollar amounts of your purchases and sales. It's another pathetic opportunity to give the IRS.
Unfortunately somebody has to die before the IRS rules allow the basis to step up. But you could be watching an unsuitable investment wither away in a bear market, not that I'm bitter about that anymore.2B said:Amen. I'm trying to deal with my Alzheimered FIL's "investments." He has a mixture of mutual funds that he bought decades ago. He has no record of the original purchase price (or date). He has had dividends reinvested during the entire period. He has no records of these purchases either and no long term file of tax returns. Fortunately (?), there isn't that much money in them so my suggestion to DW is to wait until he dies then the basis is raised to the value at his death.
Man, Grumpy, I don't know whether to envy your or pity you. Since you're not cheating on your taxes I guess you have nothing to fear and it's mostly envy. But think of all the heart-pumping excitement you've missed!grumpy said:That's exactly my point. I have been investing and paying taxes for 40 years and have NEVER heard a word from the IRS. While I make a reasonable attempt to guesstimate an accurate cost basis when I sell shares, I do not obsess about it. For many years I used DRIPs and still have dividends automatically reinvested. If the IRS was that concerned about the exact accuracy of the cost basis figures used by small time investors like us, they would develop a method of capturing the necessary data themselves or would require brokers to report it to them. Now I can see if you are in business for yourself and are, therefore, more likely to be audited anyway, you might want to have better documentation of cost basis. But for wage slaves, who are VERY unlikely to be audited at all, this all sounds to me like irrational fear of the IRS. Do the feds really have you that frightened? Grumpy