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URL:  http://boards.fool.com/i-just-sold-65-shares-of-a-mutual-i-have-been-10332656.aspx

Subject:  Re: Mutual Fund Tax Basis Date:  9/22/1998  12:37 AM
Author:  TMFTaxes Number:  5425 of 121341

[[I just sold 65 shares of a mutual I have been contributing to for many years. To reduce taxes, I sold
the last 65 shares I purchased and have a letter from my broker stating this. How do I figure the
cost basis for the shares I sold? Do I count only the last 65 shares purchased with contributions, or
do I also include any shares bought through dividend or capital gain reinvestment. I pay taxes on the
dividends and capital gains every year.]]

That's pretty much it, Rich. Both.

Somehow you have to track the last 65 shares purchased, however purchased. If they were from reinvested dividends, so be it. If they were from purchases, that's fine also.

But since you have now started with the "specific shares" method, you'll have to stick with that method. So NOW might be a good time to compute the tax basis for each and every share ever purchased, and how it was acquired. You will need to know that down the line should you ever sell any additional shares.

Doing it now will help you down the road if you ever lose or misplace your original mutual fund purchase/reinvestment documents.

TMF Taxes
Roy

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