Comments on: 2010 Goals – Happy New Year

By: 2 million

2 million — Tue, 05 Jan 2010 00:58:21 +0000

I believe there are new IRS regulations starting in 2011 that require brokerages to track cost basis and provide it on 1099s going forward so you may have that benefit at any brokerage soon.

By: Hazzard

Hazzard — Sun, 03 Jan 2010 20:25:21 +0000

Thanks Al,
I wasn’t aware of the average cost method. I thought my only option was using the FIFO. I’ll check in to that. For the most part, I’d like to just use a Schwab account to buy both individual stocks and index type funds. I’m guessing I’ll have to use the FIFO method in that case and that all the dividends etc will just add to the basis once I’ve booked the income in the year that I receive the actual dividend.

By: Spokane Al

Spokane Al — Sun, 03 Jan 2010 20:10:51 +0000

That should have read FIFO and LIFO, not FIFO and FILO – sorry about that.

By: Spokane Al

Spokane Al — Sun, 03 Jan 2010 20:04:49 +0000

Concerning your non-IRA basis question – if you keep your money in Vanguard (and many other MF firms) they will provide you with the necessary cost basis information when you sell.

Of course, this assumes that you wish to go with the average cost method. If you want to use FIFO or FILO, then you are own your own.

I do know that Quicken will allow you to track exact prices. Then when you sell via the FIFO or FILO method you would just write Vanguard a letter telling them how you wish to account for cost basis.