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.
Do capital gains apply to garage sale money? The answer depends on a number of factors. Learn more at H&R Block.
Professional golfer taxes can be complicated and confusing. Learn more about tricky golfer tax issues like travel deductions and residency rules with H&R Block.
Thinking about renting out a room in your home? Learn more about the potential tax implications with the experts at H&R Block.
Finding your taxable income is an important part of filing taxes. Learn how to calculate your taxable income with help from the experts at H&R Block.