Poll: Do you manually track your cost basis?

[Midpack]

I always have because:

• I used to trade individual stocks, and wanted to chose how/when gains were taxed.
• I used to have payroll deduction/DCA into my MF brokerage account, so I was buying shares monthly, and wanted to chose how/when gains were taxed.

When my annual 'update cost basis' reminder popped up this morning, I find myself thinking maybe I can quit since neither of the above applies any more. Maybe I'll just use what Vanguard reports from here on out and use average cost basis instead of recording every transaction/dividend.

Anyone else gone from manual to automatic?

 

[audreyh1]

No, I rely on Fidelity Investments to do most of the tracking.

I keep a copy of each year's investment report that if I even had to go back and look at original basis I could do so. But I don't expect to ever have to. It just seems wise to keep that information.

I did do some tracking for some original stock certificates that we held ourselves and finally turned into a brokerage and I have documentation on any investment that was transferred from one brokerage to another. These investments are marked as "c" on my Fidelity portfolio to indicate that the basis was customer supplied. So I have back-up documentation.

I own mostly mutual funds now, and Fidelity does average cost basis method on those funds which is fine with me, and I let them do the calculations.

The Fidelity cost basis tracking is so good on individual stocks that I have always been able to choose which lot I sold.

 

[Lakedog]

I have always tracked cost basis manually (spreadsheet) and likely always will. I do not reinvest divs in taxable accounts so fairly simple.

 

[NotMyFault]

Voted no. I has been putting money in mutual funds for years before I even new what a cost basis was. I had the concept of buy an index fund and hold it forever figured out. It was only in the last couple of years that I learned about cost basis and asset allocation. Kinda learned the hard way when decided to change my asset allocation and generated a bit of a tax bill. Luckily for me what I sold was not up very much so I got a cheap education. I have been to the library many times since then to improve my investing acumen. This site has helped out too. Thanks to all who post about their experiences you have been a big help to me.

NMF

N

 

[Texas Proud]

When I was trading individual stocks, the brokerage asked which ones I wanted to sell when I put in an order. So they tracked the basis on these.

I did not sell MF that often and the avg cost was good enough for me, so I let Vanguard track the basis on these.

I have now selected specific lot for trading MF and again, I let Vanguard track the basis on these. They have made it easy to select which ones you want to sell which is why I went with this method.

 

[FIREd]

Yes, I track my cost basis in Quicken.

 

[rodi]

I trust the brokerage... That said - Quicken pulls in some of the info - so I have the data of stuff from the last 10 years or so.

 

[scrabbler1]

I have a spreadsheet for each mutual fund I own and keep track of my cost basis (FIFO) within the spreadsheet along with each transaction. I created spreadsheets for 23 years in my working days so this is easy stuff. I have reinvested most dividends and cap gains distributions but that never slowed me down. I ignore any cost basis info the brokerage houses give me, as it is worthless and irrelevant.

 

[jerome len]

I let the various brokerage firms track my investments and then turn over YE reports to my CPA. I don't know any other way in these days of complicated technology.

 

[523HRR]

I track my cost basis in Quicken.

 

[coolowl]

Yes, I do it myself...sort of. Microsoft Money calculates it but I also have the data on a spreadsheet and double check their work.

 

[grasshopper]

I don't reinvest dividends in my taxable account, and I have also taken lots of LTCG's, so at this point all my taxable investments in Vanguard are covered. Before now Quicken took care of my cost basis.

 

[Animorph]

I used to use Excel, and now Quicken. One of the things I especially like at Fidelity is that they allow, and track, selected shares cost basis for mutual funds, not just stocks. Currently I'm trying to avoid large gains while also avoiding losses as I try to move shares from taxable into IRA and cash from IRA to taxable. I'm selecting shares very carefully.

 

[kaneohe]

I tracked them manually for decades and just recently discovered the joy of not reinvesting dividends and not having to track them anymore. A bit ironic since now the reinvestments are "covered" and are tracked by the broker/fund company. I guess it means I won't have to peer over their shoulder so it still feels good.

 

[samclem]

I've always used "Avg Cost Basis, Single Category" in the past and let the broker do the paperwork. That was easiest.

With the new rules I've gone to Specific ID and am still letting the broker do it. It's very easy with Vanguard (and probably others), no more trouble than using average. So, my "uncovered" older shares are still under the Average Cost Basis method, but as I sell them (for spending money or just to re-buy them and reset their cost basis higher) they'll be under the Specific ID method.

For those in the 15% bracket (0% LTCG), when shares are rising it probably makes sense to keep at least some shares "topped up" with a high cost basis. If the market takes a dip that'll make it easier to harvest losses.

I don't track other stuff manually, I don't even balance my checkbook anymore (I just look at the statements and make sure no unusual checks/charges are there). So, I can't see keeping track of all these purchases and sales myself. And, if my numbers ever differed from VGD, who would the IRS believe? I'd have to fix it with them on the spot. Too much hassle.

 

[HighRoller]

Yes, on a spreadsheet

 

[Nikita]

I stopped reinvesting dividends for the reason that manually calculating cost basis for taxes got to complicated. Now, its easy, just using what the brokerage provides.

 

[Alan]

I've only ever bought MF's and for the first 2 or 3 years I kept track myself even though I always used the avg cost method, but since then I've just relied on the firm to keep track.

On a related issue we have never been eligible for tax deferred IRA's and the first company I worked for in the USA had an after-tax savings plan for the first couple of years before rolling it all into a 401k. Consequently I have kept track of the basis manually for over 20 years which was very useful once we started doing 401k rollovers and ROTH conversions.

 

[Lsbcal]

I'm one of the "other". All investments are in retirement accounts. No need to worry about Schedule D.

But I do have to pay taxes on the income I take.

 

[Alan]

I'm one of the "other". All investments are in retirement accounts. No need to worry about Schedule D.

But I do have to pay taxes on the income I take.

Do you have no basis in your retirement accounts? (so no 8606's to track)

 

[Lsbcal]

Do you have no basis in your retirement accounts? (so no 8606's to track)

Nope. But a mitigating circumstance is we have significant sized Roth IRA's.

 

[Alan]

Nope. But a mitigating circumstance is we have significant sized Roth IRA's.

Nice and simple.

When I first had the opportunity to contribute to an IRA I asked my boss, and friend, about IRA's, and he said that he stopped contributing to his IRA as soon as they made it income dependent, as he didn't want to have to track the cost basis for decades to come.

Now that we are in the withdrawal phase we have to keep track of basis in the tIRA's all the way down until there is no money at all in them. (We were never eligible for ROTH's)

 

[Midpack]

Nice and simple.

Now that we are in the withdrawal phase we have to keep track of basis in the tIRA's all the way down until there is no money at all in them. (We were never eligible for ROTH's)

Us too. Our 2 rollover IRAs are fully taxable, but our 2 non-deductible TIRAs have significant cost basis. All Roth's would have made it more straightforward...

 

[samclem]

Now that we are in the withdrawal phase we have to keep track of basis in the tIRA's all the way down until there is no money at all in them.

Is this because you made some contributions to tIRA's that were nondeductible? I recall a post by Nords many years ago warning of the paperwork pitfalls, and that was enough to make me cautious to avoid even an inadvertent visit to that world.

 

[audreyh1]

Yes, I track my cost basis in Quicken.

I have found the Quicken cost basis to be quite unreliable. It doesn't seem to handle stock splits very well in terms of basis. And the cost basis for my mutual funds are totally messed up once there have been a few reinvested dividends or sells.

Thank goodness Fidelity keeps it straight.