Some funds calculate what is called the average cost basis for you. If they provide this figure then you can use it if and only if you sell all of your shares at once. If they don't provide it, or if you sell each fund piecemeal, then you need to figure the cost basis yourself. You actually have some choices, you can figure the average cost basis (total shares divided by total cost), or when you sell you can specify which shares to sell (by quantity and purchase date) and figure the cost basis of the shares you sold, or you can use the FIFO method which means you sell the first shares you bought first and so on. Don't forget that you may also have bought shares when the fund declared dividends and you reinvested those dividends. It can be tediuos to do all this and if you sell all at once its a whole lot easier, because then all you need to do is add up all you paid with cash + reinvested dividends and that's your basis. But one more thing: You'll need to seperate your shares between short (less than a year old), intermediates(between 1yr and 18 months) and long (over 18 months.). Hope this helpsJoe Varga
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