Basis method for noncovered & covered shares

Home Fairmark Forum Taxation of Investments Basis method for noncovered & covered shares

This topic contains 2 replies, has 2 voices, and was last updated by  wanttoknow 1 week, 5 days ago.

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  • #1730

    wanttoknow
    Participant

    On eight different dates in 2018 I sold all shares of a mutual fund which had been purchased 2008-13 or distributed in-kind from an IRA in 2012-15. All shares are uncovered, except for those purchased 2012-13.

    The cost basis method set up in my account was specific identification for all shares.

    When I sold the shares, I paid no attention to the date acquired or the per-share basis.

    For the non-covered shares, do I have to report the basis according to specific identification?

    I realize this makes no difference in the tax that normally would be due on all the gain. However, it could make a difference in how much gain can be deferred by investing it in a Qualified Opportunity Fund, because I may not be able to invest in the Fund within 180 days of when the earliest gains were realized.

    To report the non-covered basis according to specific identification, I would need that information from the broker, but the cost basis records in my account online show no basis or date acquired for most of the noncovered shares.

    #1732

    kaneohe
    Participant

    Might the broker have that missing info elsewhere even tho not displayed? Might be worth a call. What happens if your default is spec. ID but you do not give that spec ID when you sell……….does it default to FIFO or is there a process that makes that determination?

    #1735

    wanttoknow
    Participant

    When I sold the shares, various lots were displayed so that I could choose which lots to sell. Assuming the “cost basis summary” I now have represents the information displayed when I sold, all lots were labeled “SpecID”; and all covered lots and some noncovered lots had “date acquired” and “cost”.

    Although I blindly chose without regard to ID method or date acquired, I believe I am bound by my choices at least with regard to the covered shares.

    After submitting my original post I realized it would be to my advantage now to apply Spec. ID to the NONCOVERED shares, but differently from what the “cost basis summary” shows for some of those shares. Second best would be to use the Avg. Basis method.

    • This reply was modified 1 week, 5 days ago by  wanttoknow.
    • This reply was modified 1 week, 5 days ago by  wanttoknow.
    • This reply was modified 1 week, 5 days ago by  wanttoknow.
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