How to Find the Cost Basis for Your Investments
The cost basis of a stock or other investment is usually the amount you paid for it. It's important because it determines how much of a taxable gain -- or a loss -- you claim on your tax return. If you don't report a cost basis, you'll be taxed on the entire sale price, and you don't want that.
Not sure of the cost basis for a particular investment you sold or how to find it?
Here are some tips that could help.
If you know the date you bought it
Here are some methods to try:
- Log-in to your brokerage account. Although your broker may not list basis in the 1099-B portion of the your year-end statement, it doesn’t necessarily mean they don’t have it. Check the detail of your broker statement to see if basis information is provided in another section of the report despite not being reported to the IRS. If your current broker was the selling agent, there is usually a wealth of documentation available on your on-line brokerage account that can help you – such as detail reports on each sale.
- Look in your records for the trade confirmation you received when you bought the shares and locate the price you paid. (It's always a good idea to save these for tax purposes.) If you purchased this particular investment at different times, or haven't sold all the shares at once, you may have more than one trade confirmation statement. Be sure to mark on each confirmation how many shares were sold and the date of sale. You may need this information for later investment sales.
- Call your brokerage firm for help. Your broker may have a record of the purchase (if you bought the stock through the firm). If not, with a little begging, your broker may look up the stock price for you.
- Search online for "historical stock prices" to find one of several investment sites with such data. These include the historical section of BigCharts at MarketWatch and the finance section of Yahoo.com. It's generally acceptable to take the lowest and highest price from a given day and average them to arrive at a cost. Note: These free services may not include events that affect basis, such as reinvested dividends, spin-offs and stock splits.
- Use a special look-up tool, like the one you can access when using TurboTax Premier. It determines cost basis for you based on the date of purchase and takes into account stock splits and reinvested dividends.
- If you want to upgrade to TurboTax Online Premier, save the information you’ve entered so far.
- Click on the Home tab at the far left, click on Program Options, then select: Upgrade to a different TurboTax product.
- Check with the company itself. Some companies provide an investor relations link on their website listing historical stock data. Or you can call the company's shareholder services department for help.
- For shares purchased more than 10 years ago, go to a public library or law school library and look for back issues of newspapers, such as USA Today, to find the high and low price on the date of purchase.
- Note: This will not take into account events that affect basis, such as reinvested dividends, spin-offs and stock splits.
If you do not know the date you bought it
- Look through your paperwork for anything that might trigger your memory of when you purchased the stock: the actual stock certificate, an old tax return with details on the stock's dividends or even a life event that happened at the time you purchased the stock.
- Try to determine a date range. If you can narrow the purchase date down to a number of weeks or months, use those dates to find prices that you can average. Make sure you keep a record of your calculation in case the IRS wants to know how you came up with the cost basis.
If you received it as an inheritance or gift
If you inherited the shares:
The cost basis of inherited stock is generally "stepped-up" to the market price of the stock on the date that the benefactor died. Use the steps above to find average value for that day.
In some rare cases the executor of the estate may have made a special election to treat the stock differently. Check with your executor if you're not sure.
If you received the stock as a gift:
The cost basis is the same as the giver's basis -- unless the stock's market value on the gift date was lower than the giver's basis. In this case, if sold at a gain, use the giver's basis and if sold at a loss, use the stock's market value at time of the gift.
If your donor doesn't have any records, however, you'll need to look up the price for the date of the donor's purchase, explained above.