Cost Basis
If you sell mutual funds or stock shares, it’s important you know the basis of the shares. Knowing the basis lets you accurately calculate your capital gain or loss. To calculate your gain or loss on the sale of the shares, subtract your basis from the amount you received for the shares.
When calculating the basis of stock or mutual fund shares you sell:
- Make sure the amount you’re starting with is correct. To learn more about your starting basis, see the Original Basis and the Shares Bought Through Reinvestment tax tips.
- Look at events that have happened since you bought the shares. Some might have changed the shares’ basis (Ex: nontaxable distributions). To learn more, see the Adjusted Basis tax tip.
You can use these methods to calculate the basis of mutual funds:
- Average-basis method
- Specific identification method
- First-in, first-out method
However, you can’t use these methods to calculate the basis for stocks.
Related Resources
Understanding how to offset capital gains is a topic that many tax filers avoid. Brush up on key terms and the process with advice from H&R Block tax pros.
Congratulations on the Bonus! Learm more about the tax rate at H&R Block - whether you receive a holiday or cash bonus, it will apply to you.
Many are surprised to learn that even side gigs come with a tax price. H&R Block Tax pro's have arranged expert tips for those who owe direct sales taxes.
Have you recently earned Bitcoin income from rising stock value? Explore the rules surrounding cryptocurrency-sourced capital gains and losses with H&R Block.
