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 you need to get a copy of your wage and income transcript from the IRS? Learn more from the tax experts at H&R Block.
How much should a waitress claim in tips? Learn how to keep track of your tips for tax purposes with The Undercover Waitress, Beth Taylor, and H&R Block.
Live in one state, but work in another? Review state income tax reciprocity rules with the team at H&R Block to learn how it may affect your taxes.
Join H&R Block as we dig into the the mystery of deferred compensation plans for everyday people and the ultra-wealthy.