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Author: TAGiles Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121319  
Subject: Mutual Fund Cost Basis Date: 12/22/1998 2:08 PM
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When determing the cost basis for a mutual fund sold this year, can I add the yearly management fees and other operating expenses such as 12b-1 fees? Since it had a front-end load, that cost was already figured in when the fund was purchased, but the other fees are not added in as best as I can determine.
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Author: RheS Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7475 of 121319
Subject: Re: Mutual Fund Cost Basis Date: 12/22/1998 3:00 PM
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TAGiles wonders "When determing the cost basis for a mutual fund sold this year, can I add the yearly management fees and other operating expenses such as 12b-1 fees? Since it had a front-end load, that cost was already figured in when the fund was purchased, but the other fees are not added in as best as I can determine."

Don't worry, you've accounted for the 12b-1 and other fees... they reduced your gain (or added to your loss, if your fund managers are extra-incompetent).

You can't add this stuff to the cost basis, because it's subtracted from your gain. Your cost basis only includes what you actually paid, so it includes any commissions, and front-end loads (which are, effectively, commissions).

Does that make sense?

Dick Smith

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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: 7502 of 121319
Subject: Re: Mutual Fund Cost Basis Date: 12/22/1998 7:22 PM
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[[ When determing the cost basis for a mutual fund sold this year, can I add the
yearly management fees and other operating expenses such as 12b-1 fees?]]

As pointed out in a previous post, those fees are all built into the share price. Which is why mutual funds are so evil. All of the hiddend costs and expenses. You don't even see 'em. But they are certainly there.

[[ Since it had a front-end load, that cost was already figured in when the fund was
purchased, but the other fees are not added in as best as I can determine.]]

Oh yes they are...they are just not as visible. You'll get hit with fees and expenses out of the total value of the fund as time goes forward, which will decrease your total retun on the fund.

But quite simply, your cost basis in the mutual fund is the total amount of money invested used to purchase the number of shares than you finally ended up with. Period.

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Author: ataloss Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7531 of 121319
Subject: Re: Mutual Fund Cost Basis Date: 12/23/1998 3:09 PM
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<<As pointed out in a previous post, those fees are all built into the share price. Which is why mutual funds are so evil. All of the hiddend costs and expenses. You don't even see 'em. But they are certainly there.
>>

Also the annual management fee doesn't include things like brokerage fees. These are extra and are not reported (at least in any way the average investor can access)

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