The Motley Fool Discussion Boards

Previous Page

Financial Planning / Tax Strategies


Subject:  Re: Mutual Fund Tax Basis Date:  9/22/1998  12:37 AM
Author:  TMFTaxes Number:  5425 of 127643

[[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

SPECIAL NOTE: Remember that this response is not the "last word" on your situation. It is really only a starting point. Make sure to review the "Read This First" post
( for additional information. In addition, many of your questions may already be referenced in the Taxes Frequently Asked Questions area. In order to visit the Taxes FAQ area, go to the Fool's Money area ( and check out "Tax FAQs" in the list box, OR you can jump directly to the Taxes FAQ area ( Additionally, if any references were made to the IRS Web Site, you can get there by pointing your web browser to (
Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us