Select a link below to go directly to a topic or read through the document to learn more about the Cost Basis Lookup feature.
What is Cost Basis Lookup?
With Cost Basis Lookup, you can quickly and easily determine the cost basis on the sale of stocks and mutual funds. This can be tricky if you don't have records; when there has been corporate action, such as a stock split or merger; or if you reinvested your dividends.
More specifically, here's what Cost Basis Lookup does:
Automates complicated gain/loss calculations.
Walks you through the calculations for single and multiple purchase lots; first-in, first-out (FIFO) reporting; average cost reporting; and more.
- Quickly calculates the cost basis for any stock or mutual fund and offers historical information on corporate actions (such as stock splits, spin-offs, and mergers) back to 1950.
- Complies with Internal Revenue Code (IRC) by using the same solution the IRS depends on to calculate cost basis.
The Cost Basis Lookup tool is available in our TurboTax Premier and TurboTax Home & Business products.
How do I use Cost Basis Lookup?
- Start TurboTax.
- In TurboTax Premier, select the Federal Taxes tab, then select the Income.
- In TurboTax Home & Business, select the Personal Info tab, then select Personal Income.
- In the Your Personal Income screen, select Explore on My Own.
- Select the Start or Update button for Stocks, Mutual Funds, Bonds, Other.
- Follow the on-screen instructions
- In the Enter When This Investment Was Acquired screen, enter the date you purchased or acquired the investment.
- Select the Enter Your Purchase Information option for Cost Basis. Follow the on-screen instructions.
- Under Tell us when you purchased this investment, enter the Date Purchased.
- Under Cost Basis, select Help me figure it out (recommended).
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How much does it cost to use?
If you purchased TurboTax Home & Business or TurboTax Premier, the Cost Basis Lookup feature is included with your software. Cost Basis Lookup is not available in TurboTax Basic or Deluxe products, you would need to upgrade to TurboTax Premier or Home & Business to take advantage of the feature.
How do I calculate the cost basis of a stock split?
A stock split occurs when a company changes the number of shares outstanding (for example, "splits" shares in two or three). When a split occurs, the price per share of the stock changes proportionally so that although you will own a different number of shares after a split, the total value of the shares remains the same.
Example: Let's say you own 100 shares of ABC Inc stock. The basis in each share is $50. Therefore your total basis in the stock is $5,000 (100 x $50). ABC Inc declares a "2 for 1" split. After the split you will have 200 shares of ABC Inc stock and your basis per share will change to $25. Therefore, the total basis of your stock after the split remains $5,000 ($25 x 200).
How do I calculate the cost basis of a merger?
If you sold securities you received in a spin-off or merger, pinpointing the cost basis, or what you originally paid for your investment, can be challenging. Search your records for any paperwork the company sent you when the spin-off, merger, acquisition, or buyout occurred. It should include a formula for allocating your basis in the previous shares over your newly received shares. Below is an example of this information, issued by Lucent when it spun off Avaya in 2000:
Based on the average high and low prices at which Lucent and Avaya traded on Oct. 2, 2000, as reported for the New York Stock Exchange transaction, 94.524% of your pre-spin-off tax basis should be allocated to your new Avaya shares (including any fractional share interest).
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Note: If you have this paperwork, it is recommended you keep it in your files for future reference when you later sell the shares. If you don't have the paperwork, you can contact the company's Investor Relations or Shareholder Services for help. You might also find this information on the company's Web site.
How do I calculate the cost basis of an investment I received as a gift, or inherited?
If you received the investment as a gift, enter the date you received the gift into the Cost Basis Lookup tool, as well as the original purchase date.
If you inherited the investment, enter the date of death of the person you inherited it from into the Cost Basis Lookup tool. This is required because when investments are inherited, their cost basis changes to the closing price on the date of death.
In either case, Cost Basis Lookup will calculate your cost basis, which you can then enter into TurboTax.