Message Font: Serif | Sans-Serif
No. of Recommendations: 0
[[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 (
Print the post  


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.
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.
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.