Message Font: Serif | Sans-Serif

No. of Recommendations: 0
You will need to first determine which shares are long-term (> 1 year) or short term gains (< 1 year).

Determine which month in the past is the cutoff point for gains (shares purchased in Dec 1997 or earlier are long term gains).

Long Term Shares = shares owned as of Dec 1997.
Short Term Shares = shares owned now - Long Term Shares.

Once you have determined which shares belong where, calculate your basis for each. Your total basis for each type of gain is just total cost for all the shares. (You don't need to worry about how many shares were bought when, just how much money was put in).

This calculation is easy. Just add up all your contributions + dividends for each type of gain. This is your cost basis.

For example:

You invest \$10,000 Jan 1, 1995.
Each month you contribute \$200.
Each year, you are paid \$500 dividends (just to keep it simple)

Total long term basis: 10,000 + 3 years * 200 contrib * 12 + 3 years * 500 div. = \$18,700
Total short term basis: 1 year * 200 contrib * 12 + 1 year * 500 div. = \$2,900

In order to calculate your gain/loss, take the number of shares you got above plus the current share price:

long term gain/loss = (current share price * long term shares) - long term basis.
short term gain/loss = (current share price * short term shares) - short term basis.

rustedSoul

### Announcements

Disclaimer:
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.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
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.