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can someone help me? how do you figure the cost basis when reporting the sale of a mutual fund? Is it the cost you originally paid - which you then deduct from the sale price? or, is there more, like you don't have to pay taxes twice on the gain - i.e. 1998 capital gains and 1999 capital gains.
please, can anyone explain this to me?


Your basis is the total invested, both cash and reinvested distributions over the years. You may find some basis information on your fund statement (the 1099-B or elsewhere). While the basis is not a required item on the 1099-B, many funds provide some information when there's been a sale.

Since you sold all your shares (from previous thread), all you have to worry about is splitting your basis between long-term (held more than a year) and short-term. You'll find information about your options in the FAQ and in IRS Publication 564.

When you know what your numbers are, they're pretty easy to plop on Schedule D, lines 1 and 8.

TMF ExRO
Phil Marti
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