David1961
Thinks s/he gets paid by the post
- Joined
- Jul 26, 2007
- Messages
- 1,085
Two questions about cost basis, one general and one specific.
To calculate the cost basis of a stock or mutual fund, you just take the amount of money you have invested (including distributions you have reinvested) and add these up, don't you? I'm pretty sure there is nothing more to it, but want to make sure.
The other specific question. I inherited a stock about 3 years ago and it was held with the company (no brokerage). I reinvested the dividends to buy more shares for about 2 years. Then I transferred it to my brokerage, where i stopped reinvesting the dividends. On my brokerage statement, it lists a cost basis but there is a note that I may have to update the cost basis. When a stock is transferred to a brokerage account, does the company transfer the cost basis with it, or does the brokerage just take the value of the stock the day it was transferred and make that the cost basis? I assume it is the latter, so to really calculate it, I need to take the value of the stock the day I inherited it and add the value of all the reinvestments. Is all this correct?
To calculate the cost basis of a stock or mutual fund, you just take the amount of money you have invested (including distributions you have reinvested) and add these up, don't you? I'm pretty sure there is nothing more to it, but want to make sure.
The other specific question. I inherited a stock about 3 years ago and it was held with the company (no brokerage). I reinvested the dividends to buy more shares for about 2 years. Then I transferred it to my brokerage, where i stopped reinvesting the dividends. On my brokerage statement, it lists a cost basis but there is a note that I may have to update the cost basis. When a stock is transferred to a brokerage account, does the company transfer the cost basis with it, or does the brokerage just take the value of the stock the day it was transferred and make that the cost basis? I assume it is the latter, so to really calculate it, I need to take the value of the stock the day I inherited it and add the value of all the reinvestments. Is all this correct?