Determining cost basis on long held MF

[disneysteve]

We have 2 taxable mutual funds that we have owned since the early 1990s, long before the companies were required to track cost basis. We sold shares of one fund when we bought our house but none since. We donated some shares of the other fund to charity once. We were on a monthly auto-investment plan with both of them for many years so shares were purchased in many different transactions. Then of course there were reinvested gains along the way which got us more shares.

I believe I have all, or nearly all, statements from day one. Is there any relatively easy way to calculate our cost basis at this point? Is there software that can do this for us?

We have no immediate need to sell any shares, and realistically may never need to do so. The two funds comprise just under 8% of our portfolio so we have plenty of other money. Obviously, the easiest outcome would be for our daughter to eventually inherit the holdings and get a stepped up basis at that time. If we did need to sell, though, how do we figure out our cost basis?

 

[disneysteve]

As a follow up question, I don't recall how it worked when we donated shares before. Do we need to know the cost basis when we do that or would that only be if we were itemizing our deductions? It wouldn't be unreasonable for us to slowly drain the holdings by using them for charitable giving.

 

[Sunset]

I'd suggest turning off the re-investment option, and having them send you the cash each year.
At least that stops the issue from continuing.
That is all I know.

Other than, are you sure they didn't track the cost basis even though it was not required?

 

[pb4uski]

Grasping at straws, but do the year end statements show beginning value, purchases, reinvested dividends, sales, etc? Depending on what those numbers are parhaps you can tally up 32 years rather than 384 months.

 

[audreyh1]

Fidelity has all this information available to me.

Do you know if they are using average cost basis for this fund? This is the most typical setting. If so, then the math is easy because all the shares currently have the same cost basis.

Well I guess if they aren’t giving you any basis information at all you don’t have that either.

 

[disneysteve]

I'd suggest turning off the re-investment option, and having them send you the cash each year.
At least that stops the issue from continuing.

I did do that much so at least I'm not further complicating matters.

 

[disneysteve]

Grasping at straws, but do the year end statements show beginning value, purchases, reinvested dividends, sales, etc? Depending on what those numbers are parhaps you can tally up 32 years rather than 384 months.

I have to take a look. It's been a while since I looked at them.

 

[badatmath]

I have some like this that I also do not understand but a few years ago before they were taken over by another place it listed "non covered share basis" and "covered'. New place has dropped that designation but you might see some in small print on your statement. At least you have statements I am missing 10-15 years.

 

[Trailwalker]

I also have two funds like that. You don't need the basis to donate them with a donor advised fund. I did that with a third fund. I have the donor advised fund set up through Fidelity.

In my case, I had one discount broker bought out by another and then bought out by another. During that time, we moved three times and some of the early records are lost. When I've researched the issue, the best suggestions are to do the best you can based upon available data to establish a good faith estimate of basis. I think I can do a reasonable job of that, but the donor advised fund is taking care of some of the problem and may continue to do so in future years.


As badamath indicates, some of my Vanguard statements do show non-covered vs covered basis shares.

 

[DrRoy]

Put the info into a spreadsheet to do the calculation.

 

[RunningBum]

You don't need to know cost basis when donating shares. You get a tax deduction on the full value of the shares at the time of donation.

 

[CincyDave]

I have funds held since the 80's. Some show cost basis on the statements, others don't. For those that don't, you can call them and ask for cost basis. Most have been able to give me both covered and non-covered cost basis. One or two only provided covered basis. I have not sold any shares or added to them other than reinvested dividends and gains. You can calculate manually in a spreadsheet but it will be some work, but I would try calling them first.

 

[athena53]

I agree on the charitable donations- no cost basis needed.

I'll tell you what I'd do. I'd look up the fund's average annual return with dividends invested over your approximate holding period and "de-flate" the current value. Let's say the average annual return was 5% and you now have $100K. The cost basis would be $100,000/(1.05^10) or $61,391. If you can't get the return for the time period you want, maybe fill in with average since inception. The fund company may also be able to give you year-by-year results. My tactic in situations like this is "do something reasonable and document the heck out of it". Is the IRS really going to come after you with an audit when you declare a fat capital gain?

Alternative- see if you can find a chart showing the value over the years and choose a logical point for when you acquired it.

I'm in a similar position with some Comcast shares I bought in the mid-1980s. Family members in the business said it was "a good little company". It split several times and last time I calculated it, cost basis was about $2.25/share. It's around $40 now. I've donated most of it but I doubt the IRS will argue with me if I declare a gain of $37.75/share.

 

[sengsational]

I believe I have all, or nearly all, statements from day one. Is there any relatively easy way to calculate our cost basis at this point? Is there software that can do this for us?

The only software you need is a spreadsheet. You just add the price you paid each time you bought, including commissions. Columns with share price, share count, commission, total culative shares. If you're missing a statement that has a buy, use the total shares to make an estimate of the buy so that your share total aligns. Since you sold some before, whatever method for basis determination used should continue (average, FIFO, specific shares, etc). This sale will go in the same list, just as a negative buy, kind of thing.

 

[Texas Proud]

There is a difference in them requiring they keep cost basis and reporting it vs not reporting it...


All accounts I ever have had the actual cost I had on the shares... some were average costs per share but it did have a cost associated with it..


Are you sure your brokerage has nothing? I would call and ask them as they might have that info for you... or can get it easier than you,