FMAGX - Hold or Sell?

[Chaos Abounds]

When DH and I married nearly 19 yrs ago I thought it would be a good idea to buy FMAGX. He didn't like the idea but said ok. (I now know not to buy loaded funds) We bought with the minimum investment and it has been sitting there ever since. It is only worth around $5000. I was thinking we should just sell it and use the money to rebalance. Our AA is about 73/27 and I'd rather it be closer to 60/40. DH says no because of taxes - I don't really understand the ramifications of selling...everything we have ever bought we have held onto. I need some education in this area and DH isn't really able to explain it to me in terms I can understand...or maybe he just isn't very clear? Either way... Sell or hold?

[LOL!]

Sell. The taxes are probably not significant and you might actually save on taxes by selling. The reason is that you should have been paying taxes on the re-invested distributions each year. Thus your cost basis might be $6000 or more and not what you originally paid for it. Since $5000 is less than $6000, you may have a tax deduction.

[Chaos Abounds]

Ok, I'll show my ignorance...we bought the shares back in 1990 or '91. We haven't kept spreadsheets on reinvested dividends and don't have statements...how are we supposed to figure out the cost basis? I guess I just assumed the mutual fund company would send you a statement at tax time letting you know what you needed for filing your taxes. Man, I'm feeling really inept.

[LOL!]

Is this a taxable account? If so, you need to report the cost basis when you sell. I usually do this by looking at all my annual statements and adding up the cost of all the shares that I sold. The mutual fund company is not required to do this for you, but they may have. Call them up and ask them.

Even if they haven't, they could probably make available to you all your annual statements. Sometimes they only keep the last 7 years of statements though. You may be able to decipher you cost basis from past tax returns, but that gets complicated.

[Chaos Abounds]

Quote:

Originally Posted by LOL! Is this a taxable account? If so, you need to report the cost basis when you sell. I usually do this by looking at all my annual statements and adding up the cost of all the shares that I sold. The mutual fund company is not required to do this for you, but they may have. Call them up and ask them. Even if they haven't, they could probably make available to you all your annual statements. Sometimes they only keep the last 7 years of statements though. You may be able to decipher you cost basis from past tax returns, but that gets complicated.

Yes, it is a taxable acct...that was 19 yrs. ago...what happens if you can't figure out your cost basis? What do you do? Man, I have a LOT to learn.

[DblDoc]

A quick Google search yielded this: Unknown cost basis or purchase date - Ask TaxGuru

DD

[2soon2tell]

CA,

Go to the yahoo finance site and put FMAGX into quote box.
Click the historical price box and ask for dividends only. This screen will list all of the yearly distributions for each share of the fund. You should then be able to adjust the cost basis upward for each share from the original purchase date.

[Chaos Abounds]

Quote:

Originally Posted by 2soon2tell CA, Go to the yahoo finance site and put FMAGX into quote box. Click the historical price box and ask for dividends only. This screen will list all of the yearly distributions for each share of the fund. You should then be able to adjust the cost basis upward for each share from the original purchase date.

Ahh, yes - thank you!

[LOL!]

Don't jump the gun. Call up your broker (Fidelity?) or use your account at their web site and get the statements that are available. Do this before trying to do something harder.

[audreyh1]

If your broker is fidelity they will know the correct basis to use and the correct realized gain/loss when you sell. 19 years - no problem. Your cost basis and gain/loss is available on-line for each position you hold in your brokerage or mutual fund account.

Audrey

[Chaos Abounds]

Quote:

Originally Posted by audreyh1 If your broker is fidelity they will know the correct basis to use and the correct realized gain/loss when you sell. 19 years - no problem. Your cost basis and gain/loss is available on-line for each position you hold in your brokerage or mutual fund account. Audrey

I went online and looked and it only shows the gain/loss for the year. I'm trying to find out if we closed the acct. what our gain/loss would be. We only have one account with Fidelity.

Edited to add: I see now where it shows "change since purchase" but I still don't see cost basis anywhere.

[audreyh1]

Look at the "positions" view for your account. Click on the "Cost basis" tab. This will show you the cost basis $, change since purchase $, and change since purchase %, and and that cost basis will take into account all reinvested dividends.

I see there is a slightly different alternate view for positions. Go back to your portfolio summary, under "select action" choose "Positions". This will show you a list with the current values. Click on the "Cost Basis" tab, and that will take to you what I describe above.

Anyway - the "change since purchase $" gives you the same information. That shows your capital gain or loss since purchase. Subtract from most recent value and you have the basis.

From my experience Fidelity does take into account reinvestments when they compute the costs basis. I know they supply me the correct realized gain to report on my Schedule D, because I have checked many times. They have friendly helpful phone people, so someone is available to answer your questions on the specifics of this investment if you still have questions.

Audrey

[LOL!]

Now that we think Fidelity will tell you if you have a loss or a gain, do you mind letting us know? If you can't stand to divulge this publicly, how about in a private message? Thanks! Just curious.

Oh, one thing you can do now is to change it so that you do NOT re-invest dividends, but have them sent to you as a check. Then you can invest that money in something that you want to.

[Chaos Abounds]

Quote:

Originally Posted by LOL! Now that we think Fidelity will tell you if you have a loss or a gain, do you mind letting us know? If you can't stand to divulge this publicly, how about in a private message? Thanks! Just curious. Oh, one thing you can do now is to change it so that you do NOT re-invest dividends, but have them sent to you as a check. Then you can invest that money in something that you want to.

It's a loser!
audreyh1 - thanks for the info...very helpful.

[LOL!]

Ah, well, then hubby's main objection doesn't hold water. I'm sure you have more money than what you originally put in years ago. It's just that you've been paying taxes on the distributions all along. Selling at "loss" will help recoup some of those taxes.

[audreyh1]

Glad you explained that LOL! That is an important "silver lining" point.

Audrey

[LOL!]

I've lived it with Vanguard Health Care which I held for years and years, then sold at a loss.

[audreyh1]

That helped take some of the pain out of rebalancing when I sold bond funds to buy equity funds the last couple of times!

Audrey