Message Font: Serif | Sans-Serif
UnThreaded | Threaded | Whole Thread (50) | Ignore Thread Prev | Next
Author: ptheland Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 124156  
Subject: Re: Dividend Reinvestment - A Tax Nightmare? Date: 7/6/2008 9:06 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 4
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.

Shares        dollars
500.0000 8,460.00
1.4563 25.12
1.3423 25.46
0.9452 19.13
2.7458 43.58
-------- --------
506.4896 8,573.29

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.

Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (50) | Ignore Thread Prev | Next


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
Post of the Day:
Macro Economics

Looking at Oil and Gas
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.