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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121169  
Subject: Re: CostBasis of stock and/or fund shares Date: 1/27/1999 7:31 PM
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[[I read your answer re above to 9047. That is the same formula I have used.
Now my fund companies tell be they divide the cost basis by # of shares at time
of sale. (Average cost-Single Category) The result can be quite different after
years of dividend reinvestments. Will you explain that for me, please?]]

The main reason is the the cost basis rules for stocks are COMPLETELY DIFFERENT than for mutual funds. You can read more about this issue in the Taxes FAQ area. We also discuss it in MUCH more detail in the TMF Investment Tax Guide. You might want to check it out.

TMF Taxes
Roy

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