Mutual Fund cost basis

[Roberts]

Originally Posted by Snaggletooth

I would use then-prevailing price as a basis after you've gone back as far as you can. I would not use zero. That's what the IRS does on their deficiency notices to maximize revenue, and there would be more factual support for the price than for zero.

You can find the "then-prevailing price" for any date using a number of different websites, such as BigMarkets.com.

I think you mean BigCharts.com. I can see the pricing going back several years and the reinvestment pricing at each time via the fund site but that's not an exact answer. If I go back about 12 years and build it, it'll come up with a tax loss. I hate to report a tax loss if you can't prove it with fund statements. BUT, I'm pretty darn sure they've turned over the entire portfolio in that 12 year period so built in gains should have been realized.

The reality is, with a mutual fund, they pay the taxes all along so the gain in the best of times is often limited. If it's a bond fund I've never seen a long term investor who had an appreciable gain. If it were an individual stock, it would be a totally different situation.

They are selling it all at once to pay off all of their debts before going into a nursing home. Imagine being 85ish and having significant debts. Ouch.

[Lion]

I had to reconstruct the cost basis of a mutual fund my ex and I bought our son when he was born; then ex sold it kid's jr. year in HS just when it has to show on FAFSA forms! Of course, ex did not cooperate re basis. I had some tax returns and was able to get some statements from the company. I did learn that companies have to keep the record of your initial purchase, so I had a date, share number, and price at his first purchase. I calculated the missing years based on what reinvestments he had to have made to work his way up to the number of shares that was eventually documented on statements. BigCharts helped a lot with NAV for the typical dividend dates. It was a popular fund, so my current broker was able to find info from other clients to help fill in gaps. I felt pretty confident knowing the two ends of the picture.