Mutual Fund Cost Basis Question

[ownyourfuture]

Columbia Minnesota Tax-Exempt A (IMNTX) *3.00% Load Waived @Fidelity*

I contacted Fidelity & talked to a representative sometime ago.
All I remember is when I was done, I still didn't understood the method they use, or the reason ?

If you look at the top line in the file I included, you'll see that the last purchase was for $5,000.00 on September 27th.

The closing price of the fund that day was $5.50, so the quantity shown is correct. 5,000.00 divided by 5.50 = 909.091
Yet it shows a cost basis of $5,008.81 ?



Other than the monthly dividend reinvestments, I've made a total of 10 purchases.
2,500.00 8 times
3,000.00 1 time
5,000.00 1 time

And for each one, it shows a higher cost basis & amount.
My question is, why not show the 'actual cost basis & amount' for each purchase ?

Here’s a link to Yahoo historical prices for IMNTX
https://finance.yahoo.com/quote/IMNTX/history?p=IMNTX

FYI: *The fund closed @ $5.50 on Wednesday & Thursday*

 

[youbet]

Do you pay Fidelity a commission ( not a load) for each purchase?

 

[ownyourfuture]

Do you pay Fidelity a commission ( not a load) for each purchase?

No
Here's a screenshot of my last purchase

 

[youbet]

No
Here's a screenshot of my last purchase

Hmmmm....... well, ya got charged $8.81 for something. Sounds too high to be the exchange fee.

 

[ownyourfuture]

Hmmmm....... well, ya got charged $8.81 for something. Sounds too high to be the exchange fee.

Here's another screenshot showing Expenses & Fees



Note: This fund is now available NTF (no transaction fee) & offered load-waived through Fidelity.

It's been this way since I started investing in it. That's what attracted me to it.

 

[youbet]

Here's another screenshot showing Expenses & Fees



Note: This fund is now available NTF (no transaction fee) & offered load-waived through Fidelity.

It's been this way since I started investing in it. That's what attracted me to it.

Go to "transaction history " and see how much they debited your cash account for.

 

[LOL!]

Clients need to specify the Cost Basis Method to their financial institutions.

For mutual funds (but not for ETFs nor for stocks), one can select Average Basis (which is probably the default) or Specific Identification (or other things which are just Specific Identification in another guise).

So what have you specified for the Cost Basis Method? Have to talked to Fidelity about this? Do you understand the different Cost Basis Methods?

I'll just say that Average Basis means that it is unlikely that your Cost Basis will ever be what you actually paid for the specific shares if you have more than one transaction (including dividend reinvestements). Only with Specific Identification will the shares have a cost basis that is the amount you paid for them.

Also note that Average Basis will change for your old shares every time you have another transaction. That is Average Basis will present a moving target to you.

 

[ownyourfuture]

Go to "transaction history " and see how much they debited your cash account for.

The amount debited has always been correct.

 

[ownyourfuture]

Clients need to specify the Cost Basis Method to their financial institutions.

For mutual funds (but not for ETFs nor for stocks), one can select Average Basis (which is probably the default) or Specific Identification (or other things which are just Specific Identification in another guise).

So what have you specified for the Cost Basis Method? Have to talked to Fidelity about this? Do you understand the different Cost Basis Methods?

I'll just say that Average Basis means that it is unlikely that your Cost Basis will ever be what you actually paid for the specific shares if you have more than one transaction (including dividend reinvestements). Only with Specific Identification will the shares have a cost basis that is the amount you paid for them.

Also note that Average Basis will change for your old shares every time you have another transaction. That is Average Basis will present a moving target to you.

I'll give Fidelity a call tomorrow or Monday & find out.

 

[bingybear]

I've got to agree with LOL!.

look at your original post with all the entries for basis per share is 5.51. Go look at a chart for that MF of NAV. While it doesn't vary widely, it is not that stable. You basis is averaged, your # shares and purchase price are not. Try changing your accounting method (FIFO or Selected shares instead of averaged)

 

[RunningBum]

Clients need to specify the Cost Basis Method to their financial institutions.

For mutual funds (but not for ETFs nor for stocks), one can select Average Basis (which is probably the default) or Specific Identification (or other things which are just Specific Identification in another guise).

So what have you specified for the Cost Basis Method? Have to talked to Fidelity about this? Do you understand the different Cost Basis Methods?

I'll just say that Average Basis means that it is unlikely that your Cost Basis will ever be what you actually paid for the specific shares if you have more than one transaction (including dividend reinvestements). Only with Specific Identification will the shares have a cost basis that is the amount you paid for them.

Also note that Average Basis will change for your old shares every time you have another transaction. That is Average Basis will present a moving target to you.

That looks like a likely answer. Note that the cost basis per share for all purchases is $5.51. If you bought 100 shares at $5.52 and later 100 shares at $5.50, the cost per share using average basis is $5.51 for each share.

If you haven't sold any yet you should be able to change to Spec ID.

 

[ownyourfuture]

Haven't called Fidelity yet, but I added up all my purchases,
(not including monthly dividend reinvestments) & it looks like it is indeed the average cost basis (($5.51)) for all shares.



Thanks to all who replied

 

[Texas Proud]

It looks like you have avg cost basis on your purchases instead of specific lots... the 5.51 is shown for each and every purchase which we know you did not buy all at that price..

If you look at the bottom and multiply you are under $2 bucks off which is nothing...

 

[RunningBum]

It looks like you have avg cost basis on your purchases instead of specific lots... the 5.51 is shown for each and every purchase which we know you did not buy all at that price..

If you look at the bottom and multiply you are under $2 bucks off which is nothing...

Isn't that exactly what he said?

 

[marinauser]

And the two dollars is probably rounding. You are probably seeing cost per shares to two decimal places. However, the actual trade is probably out to 4 decimal places. Likewise, you share count may be rounded somewhat.