The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: Re: Dividend Reinvestment - A Tax Nightmare?||Date: 7/6/2008 9:06 PM|
|Author: ptheland||Number: 101280 of 122529|
But have you considered just what exactly is the "average cost"?
500 shares @ 16.92
1.4563 @ 17.25
1.3423 @ 18.97
0.9452 @ 20.24
2.7458 @ 15.87
You've got $/share info here. That is the fastest way to confuse yourself with the tax issues around stock sales. Let's correct the presentation of your data first.
So now we can divide and get an average cost of 16.9269 per share.
At least with a mutual fund, they (presumably) can keep track of it for you.
I wouldn't make that assumption. Brokers and mutual fund sponsors tracking cost basis information for their clients is a fairly recent phenomenon. And it's mainly customer service driven. They don't have to do it, but they do to provide an additional service. There are also rumblings in Congress from time to time to start requiring brokers to track and report cost info to the IRS. That's only because technology is finally to a place where that is reasonably possible for most brokers to accomplish.
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