Cost Basis of Investment Sales for Tax Purposes

David Schwartz · Joined: 02 Aug 2007 Posts: 31

OK-the most important thing this program can do for me is to figure the cost
basis of shares of stock or mutual fund I have sold within the calendar year
as far tax purposes are concerned (i.e.-transactions reported on 1099-B's.)

Lets say I sold 100 shares of a mutual fund on July 1, 2007. I first
started buying the fund in 2000. I have sold some in previous years, bought
some outright in previous years, and reinvested dividends almost every month
which, is, in effect, buying.

I understand the First In First Out concept, but can the program figure out
the cost basis of the 100 shares I sold? This can be pretty difficult with
50 or so transactions over a 7 year period.

How might I get this information?

Thanks

--
David Schwartz
Commack, NY

Archived from group: microsoft>public>money

Cal Learner-- MVP · Joined: 02 Aug 2007 Posts: 4135

In microsoft.public.money, David Schwartz wrote:

>OK-the most important thing this program can do for me is to figure the cost
>basis of shares of stock or mutual fund I have sold within the calendar year
>as far tax purposes are concerned (i.e.-transactions reported on 1099-B's.)
>
>Lets say I sold 100 shares of a mutual fund on July 1, 2007. I first
>started buying the fund in 2000. I have sold some in previous years, bought
>some outright in previous years, and reinvested dividends almost every month
>which, is, in effect, buying.
>
>I understand the First In First Out concept, but can the program figure out
>the cost basis of the 100 shares I sold? This can be pretty difficult with
>50 or so transactions over a 7 year period.

Money requires you to enter those 50 or so transactions as Buy,
ReinvestDividend, ReinvestLTCapitalGain etc.

>
>How might I get this information?

So your question might be how to get the info into the tax program
after you entered the 50 or so Buy transactions and the Sell
transaction. That has an easy answer, so if that is the question,
re-ask.

If your question is how to get the info to enter the 50 or so
transactions, that is a problem. Your mutual fund company may be
able to provide you with average basis info so that you could enter
an equivalent transaction to represent the older shares. Then when
you sell, you will hand-modify the date for the Schedule D buy to
"Various".

So find out what info is available from your fund company and do
your best. Re-ask once you know what is available if you then wonder
how to enter that into Money.

Keep your current transactions up to date for the future.

David Schwartz · Joined: 02 Aug 2007 Posts: 31

All of the transactions were entered into Money at the time of the
transactions.
How do I calculate the cost basis of the 100 shares of mutual fund I sold on
July 1, 2007?
A better question is, "How do I get Money to calculate the cost basis of the
100 shares of mutual fund I sold on July 1, 2007."
Also, if the FIFO principle determines that some of the 100 shares, but not
all were purchased less than a year before the sale, which would make the
proceeds short term capital gain, will the program tell me that also or do I
have to do that manually?
Dave

"Cal Learner-- MVP" wrote in message @4ax.com...
> In microsoft.public.money, David Schwartz wrote:
>
>>OK-the most important thing this program can do for me is to figure the
>>cost
>>basis of shares of stock or mutual fund I have sold within the calendar
>>year
>>as far tax purposes are concerned (i.e.-transactions reported on
>>1099-B's.)
>>
>>Lets say I sold 100 shares of a mutual fund on July 1, 2007. I first
>>started buying the fund in 2000. I have sold some in previous years,
>>bought
>>some outright in previous years, and reinvested dividends almost every
>>month
>>which, is, in effect, buying.
>>
>>I understand the First In First Out concept, but can the program figure
>>out
>>the cost basis of the 100 shares I sold? This can be pretty difficult
>>with
>>50 or so transactions over a 7 year period.
>
> Money requires you to enter those 50 or so transactions as Buy,
> ReinvestDividend, ReinvestLTCapitalGain etc.
>
>>
>>How might I get this information?
>
> So your question might be how to get the info into the tax program
> after you entered the 50 or so Buy transactions and the Sell
> transaction. That has an easy answer, so if that is the question,
> re-ask.
>
> If your question is how to get the info to enter the 50 or so
> transactions, that is a problem. Your mutual fund company may be
> able to provide you with average basis info so that you could enter
> an equivalent transaction to represent the older shares. Then when
> you sell, you will hand-modify the date for the Schedule D buy to
> "Various".
>
> So find out what info is available from your fund company and do
> your best. Re-ask once you know what is available if you then wonder
> how to enter that into Money.
>
> Keep your current transactions up to date for the future.

David Schwartz · Joined: 02 Aug 2007 Posts: 31

And, I should mention, I am running Money 2007

"Cal Learner-- MVP" wrote in message @4ax.com...
> In microsoft.public.money, David Schwartz wrote:
>
>>OK-the most important thing this program can do for me is to figure the
>>cost
>>basis of shares of stock or mutual fund I have sold within the calendar
>>year
>>as far tax purposes are concerned (i.e.-transactions reported on
>>1099-B's.)
>>
>>Lets say I sold 100 shares of a mutual fund on July 1, 2007. I first
>>started buying the fund in 2000. I have sold some in previous years,
>>bought
>>some outright in previous years, and reinvested dividends almost every
>>month
>>which, is, in effect, buying.
>>
>>I understand the First In First Out concept, but can the program figure
>>out
>>the cost basis of the 100 shares I sold? This can be pretty difficult
>>with
>>50 or so transactions over a 7 year period.
>
> Money requires you to enter those 50 or so transactions as Buy,
> ReinvestDividend, ReinvestLTCapitalGain etc.
>
>>
>>How might I get this information?
>
> So your question might be how to get the info into the tax program
> after you entered the 50 or so Buy transactions and the Sell
> transaction. That has an easy answer, so if that is the question,
> re-ask.
>
> If your question is how to get the info to enter the 50 or so
> transactions, that is a problem. Your mutual fund company may be
> able to provide you with average basis info so that you could enter
> an equivalent transaction to represent the older shares. Then when
> you sell, you will hand-modify the date for the Schedule D buy to
> "Various".
>
> So find out what info is available from your fund company and do
> your best. Re-ask once you know what is available if you then wonder
> how to enter that into Money.
>
> Keep your current transactions up to date for the future.

Cal Learner-- MVP · Joined: 02 Aug 2007 Posts: 4135

In microsoft.public.money, David Schwartz wrote:

>All of the transactions were entered into Money at the time of the
>transactions.
>How do I calculate the cost basis of the 100 shares of mutual fund I sold on
>July 1, 2007?

Good. In the US, there are three permitted ways to report mutual
fund sales. Once you have used an average basis method for a given
fund, you are required to stick with it. Since you only now have
sold this fund, and you want to use the specific shares method with
FIFO, go to the Details for the fund by right-clicking any
reference. On the CostBasis item, select ActualCostBasis.

Once you have done that, just enter a Sell of 100 shares. Depending
on settings, Money will either assume FIFO or make that a selection.
When you generate the Schedule D info, Money will actually make an
entry for each lot that has shares sold. It could combine them, but
it does not.

The Capital Gains report should then tell you what the lot data was.
Even better is to have Money create a TXF file that you can feed to
TaxCut or TurboTax to fill out your schedule D.

So how do you proceed ? In Money 2007,
Taxes->TaxTools->ExportToTaxSoftware

Set the ReviewTaxesFor drop-down to Completed2007TaxYear.
Continue.

Select the items that you want Money to send to the tax program,
and de-select those things that you will instead pull off of the
1099s. This may be Schedule A, Schedule C, and both long- and
short-term capital gains, depending on your needs.

If you want to print a tax report for
yourself or your tax preparer, do not click Continue at this point.
Instead click File->Print to print the selected tax information.
This may be in two sections: the forms, line numbers and amounts
for most of the selected items, and then the information for
Schedule D.

I recommend that you "Export your tax information
as a data file you can use with any tax software program". This
will produce a .txf file. I suggest you do not use the FileByHand,
UseTurboTax, or UseACPA choices in Money 2005 or 2006. Start your
tax program. Make a copy of your tax file under another name.
Then File->Import the .txf file. If you see that you selected the
wrong information for export/import go back to Money and re-select
the items. Then go back to the copy of the tax program that you
had not imported into yet, save another copy of that and
File->Import the revised .txf file.

In cases where you wanted to see the tax lot info without entering a
sell, the CaptitalGainsManager can let you do that. That is useful
when you are thinking about selling and telling the broker which
shares you want to sell in advance.

>A better question is, "How do I get Money to calculate the cost basis of the
>100 shares of mutual fund I sold on July 1, 2007."
>Also, if the FIFO principle determines that some of the 100 shares, but not
>all were purchased less than a year before the sale, which would make the
>proceeds short term capital gain, will the program tell me that also or do I
>have to do that manually?
>Dave
>

David Schwartz · Joined: 02 Aug 2007 Posts: 31

Cheeze, thanks a lot. I hope you didn't sit there and type this whole thing
out. I hope it was prepackaged. But thanks anyway.

--
David Schwartz
Commack, NY

"Cal Learner-- MVP" wrote in message @4ax.com...
> In microsoft.public.money, David Schwartz wrote:
>
>>All of the transactions were entered into Money at the time of the
>>transactions.
>>How do I calculate the cost basis of the 100 shares of mutual fund I sold
>>on
>>July 1, 2007?
>
> Good. In the US, there are three permitted ways to report mutual
> fund sales. Once you have used an average basis method for a given
> fund, you are required to stick with it. Since you only now have
> sold this fund, and you want to use the specific shares method with
> FIFO, go to the Details for the fund by right-clicking any
> reference. On the CostBasis item, select ActualCostBasis.
>
> Once you have done that, just enter a Sell of 100 shares. Depending
> on settings, Money will either assume FIFO or make that a selection.
> When you generate the Schedule D info, Money will actually make an
> entry for each lot that has shares sold. It could combine them, but
> it does not.
>
> The Capital Gains report should then tell you what the lot data was.
> Even better is to have Money create a TXF file that you can feed to
> TaxCut or TurboTax to fill out your schedule D.
>
> So how do you proceed ? In Money 2007,
> Taxes->TaxTools->ExportToTaxSoftware
>
> Set the ReviewTaxesFor drop-down to Completed2007TaxYear.
> Continue.
>
> Select the items that you want Money to send to the tax program,
> and de-select those things that you will instead pull off of the
> 1099s. This may be Schedule A, Schedule C, and both long- and
> short-term capital gains, depending on your needs.
>
> If you want to print a tax report for
> yourself or your tax preparer, do not click Continue at this point.
> Instead click File->Print to print the selected tax information.
> This may be in two sections: the forms, line numbers and amounts
> for most of the selected items, and then the information for
> Schedule D.
>
> I recommend that you "Export your tax information
> as a data file you can use with any tax software program". This
> will produce a .txf file. I suggest you do not use the FileByHand,
> UseTurboTax, or UseACPA choices in Money 2005 or 2006. Start your
> tax program. Make a copy of your tax file under another name.
> Then File->Import the .txf file. If you see that you selected the
> wrong information for export/import go back to Money and re-select
> the items. Then go back to the copy of the tax program that you
> had not imported into yet, save another copy of that and
> File->Import the revised .txf file.
>
>
> In cases where you wanted to see the tax lot info without entering a
> sell, the CaptitalGainsManager can let you do that. That is useful
> when you are thinking about selling and telling the broker which
> shares you want to sell in advance.
>
>>A better question is, "How do I get Money to calculate the cost basis of
>>the
>>100 shares of mutual fund I sold on July 1, 2007."
>>Also, if the FIFO principle determines that some of the 100 shares, but
>>not
>>all were purchased less than a year before the sale, which would make the
>>proceeds short term capital gain, will the program tell me that also or do
>>I
>>have to do that manually?
>>Dave
>>

David Schwartz · Joined: 02 Aug 2007 Posts: 31

HEY WAIT-WE'RE NOT DONE YET!!!!
HOW COME MY BONDS DON'T SHOW UP ON THE CAPITAL GAINS REPORT?
Dave

"Cal Learner-- MVP" wrote in message @4ax.com...
> In microsoft.public.money, David Schwartz wrote:
>
>>All of the transactions were entered into Money at the time of the
>>transactions.
>>How do I calculate the cost basis of the 100 shares of mutual fund I sold
>>on
>>July 1, 2007?
>
> Good. In the US, there are three permitted ways to report mutual
> fund sales. Once you have used an average basis method for a given
> fund, you are required to stick with it. Since you only now have
> sold this fund, and you want to use the specific shares method with
> FIFO, go to the Details for the fund by right-clicking any
> reference. On the CostBasis item, select ActualCostBasis.
>
> Once you have done that, just enter a Sell of 100 shares. Depending
> on settings, Money will either assume FIFO or make that a selection.
> When you generate the Schedule D info, Money will actually make an
> entry for each lot that has shares sold. It could combine them, but
> it does not.
>
> The Capital Gains report should then tell you what the lot data was.
> Even better is to have Money create a TXF file that you can feed to
> TaxCut or TurboTax to fill out your schedule D.
>
> So how do you proceed ? In Money 2007,
> Taxes->TaxTools->ExportToTaxSoftware
>
> Set the ReviewTaxesFor drop-down to Completed2007TaxYear.
> Continue.
>
> Select the items that you want Money to send to the tax program,
> and de-select those things that you will instead pull off of the
> 1099s. This may be Schedule A, Schedule C, and both long- and
> short-term capital gains, depending on your needs.
>
> If you want to print a tax report for
> yourself or your tax preparer, do not click Continue at this point.
> Instead click File->Print to print the selected tax information.
> This may be in two sections: the forms, line numbers and amounts
> for most of the selected items, and then the information for
> Schedule D.
>
> I recommend that you "Export your tax information
> as a data file you can use with any tax software program". This
> will produce a .txf file. I suggest you do not use the FileByHand,
> UseTurboTax, or UseACPA choices in Money 2005 or 2006. Start your
> tax program. Make a copy of your tax file under another name.
> Then File->Import the .txf file. If you see that you selected the
> wrong information for export/import go back to Money and re-select
> the items. Then go back to the copy of the tax program that you
> had not imported into yet, save another copy of that and
> File->Import the revised .txf file.
>
>
> In cases where you wanted to see the tax lot info without entering a
> sell, the CaptitalGainsManager can let you do that. That is useful
> when you are thinking about selling and telling the broker which
> shares you want to sell in advance.
>
>>A better question is, "How do I get Money to calculate the cost basis of
>>the
>>100 shares of mutual fund I sold on July 1, 2007."
>>Also, if the FIFO principle determines that some of the 100 shares, but
>>not
>>all were purchased less than a year before the sale, which would make the
>>proceeds short term capital gain, will the program tell me that also or do
>>I
>>have to do that manually?
>>Dave
>>

Cal Learner-- MVP · Joined: 02 Aug 2007 Posts: 4135

In microsoft.public.money, David Schwartz wrote:

>HEY WAIT-WE'RE NOT DONE YET!!!!
>HOW COME MY BONDS DON'T SHOW UP ON THE CAPITAL GAINS REPORT?

I dunno. I never sold a bond. You mean a corporate or muni bond? And
you did a Buy before and a Sell transaction dated in 2007?

>Dave
>
>
>
>"Cal Learner-- MVP" wrote in message
>@4ax.com...
>> In microsoft.public.money, David Schwartz wrote:
>>
>>>All of the transactions were entered into Money at the time of the
>>>transactions.
>>>How do I calculate the cost basis of the 100 shares of mutual fund I sold
>>>on
>>>July 1, 2007?
>>
>> Good. In the US, there are three permitted ways to report mutual
>> fund sales. Once you have used an average basis method for a given
>> fund, you are required to stick with it. Since you only now have
>> sold this fund, and you want to use the specific shares method with
>> FIFO, go to the Details for the fund by right-clicking any
>> reference. On the CostBasis item, select ActualCostBasis.
>>
>> Once you have done that, just enter a Sell of 100 shares. Depending
>> on settings, Money will either assume FIFO or make that a selection.
>> When you generate the Schedule D info, Money will actually make an
>> entry for each lot that has shares sold. It could combine them, but
>> it does not.
>>
>> The Capital Gains report should then tell you what the lot data was.
>> Even better is to have Money create a TXF file that you can feed to
>> TaxCut or TurboTax to fill out your schedule D.
>>
>> So how do you proceed ? In Money 2007,
>> Taxes->TaxTools->ExportToTaxSoftware
>>
>> Set the ReviewTaxesFor drop-down to Completed2007TaxYear.
>> Continue.
>>
>> Select the items that you want Money to send to the tax program,
>> and de-select those things that you will instead pull off of the
>> 1099s. This may be Schedule A, Schedule C, and both long- and
>> short-term capital gains, depending on your needs.
>>
>> If you want to print a tax report for
>> yourself or your tax preparer, do not click Continue at this point.
>> Instead click File->Print to print the selected tax information.
>> This may be in two sections: the forms, line numbers and amounts
>> for most of the selected items, and then the information for
>> Schedule D.
>>
>> I recommend that you "Export your tax information
>> as a data file you can use with any tax software program". This
>> will produce a .txf file. I suggest you do not use the FileByHand,
>> UseTurboTax, or UseACPA choices in Money 2005 or 2006. Start your
>> tax program. Make a copy of your tax file under another name.
>> Then File->Import the .txf file. If you see that you selected the
>> wrong information for export/import go back to Money and re-select
>> the items. Then go back to the copy of the tax program that you
>> had not imported into yet, save another copy of that and
>> File->Import the revised .txf file.
>>
>>
>> In cases where you wanted to see the tax lot info without entering a
>> sell, the CaptitalGainsManager can let you do that. That is useful
>> when you are thinking about selling and telling the broker which
>> shares you want to sell in advance.
>>
>>>A better question is, "How do I get Money to calculate the cost basis of
>>>the
>>>100 shares of mutual fund I sold on July 1, 2007."
>>>Also, if the FIFO principle determines that some of the 100 shares, but
>>>not
>>>all were purchased less than a year before the sale, which would make the
>>>proceeds short term capital gain, will the program tell me that also or do
>>>I
>>>have to do that manually?
>>>Dave
>>>
>

David Schwartz · Joined: 02 Aug 2007 Posts: 31

One from Verizon and one from GTE. Both show up on my 1099-B along with the
other investments that the Capital Gains report found.
The sell transaction was in 07, the buy in 06.

"Cal Learner-- MVP" wrote in message @4ax.com...
> In microsoft.public.money, David Schwartz wrote:
>
>>HEY WAIT-WE'RE NOT DONE YET!!!!
>>HOW COME MY BONDS DON'T SHOW UP ON THE CAPITAL GAINS REPORT?
>
> I dunno. I never sold a bond. You mean a corporate or muni bond? And
> you did a Buy before and a Sell transaction dated in 2007?
>
>
>>Dave
>>
>>
>>
>>"Cal Learner-- MVP" wrote in message
>>@4ax.com...
>>> In microsoft.public.money, David Schwartz wrote:
>>>
>>>>All of the transactions were entered into Money at the time of the
>>>>transactions.
>>>>How do I calculate the cost basis of the 100 shares of mutual fund I
>>>>sold
>>>>on
>>>>July 1, 2007?
>>>
>>> Good. In the US, there are three permitted ways to report mutual
>>> fund sales. Once you have used an average basis method for a given
>>> fund, you are required to stick with it. Since you only now have
>>> sold this fund, and you want to use the specific shares method with
>>> FIFO, go to the Details for the fund by right-clicking any
>>> reference. On the CostBasis item, select ActualCostBasis.
>>>
>>> Once you have done that, just enter a Sell of 100 shares. Depending
>>> on settings, Money will either assume FIFO or make that a selection.
>>> When you generate the Schedule D info, Money will actually make an
>>> entry for each lot that has shares sold. It could combine them, but
>>> it does not.
>>>
>>> The Capital Gains report should then tell you what the lot data was.
>>> Even better is to have Money create a TXF file that you can feed to
>>> TaxCut or TurboTax to fill out your schedule D.
>>>
>>> So how do you proceed ? In Money 2007,
>>> Taxes->TaxTools->ExportToTaxSoftware
>>>
>>> Set the ReviewTaxesFor drop-down to Completed2007TaxYear.
>>> Continue.
>>>
>>> Select the items that you want Money to send to the tax program,
>>> and de-select those things that you will instead pull off of the
>>> 1099s. This may be Schedule A, Schedule C, and both long- and
>>> short-term capital gains, depending on your needs.
>>>
>>> If you want to print a tax report for
>>> yourself or your tax preparer, do not click Continue at this point.
>>> Instead click File->Print to print the selected tax information.
>>> This may be in two sections: the forms, line numbers and amounts
>>> for most of the selected items, and then the information for
>>> Schedule D.
>>>
>>> I recommend that you "Export your tax information
>>> as a data file you can use with any tax software program". This
>>> will produce a .txf file. I suggest you do not use the FileByHand,
>>> UseTurboTax, or UseACPA choices in Money 2005 or 2006. Start your
>>> tax program. Make a copy of your tax file under another name.
>>> Then File->Import the .txf file. If you see that you selected the
>>> wrong information for export/import go back to Money and re-select
>>> the items. Then go back to the copy of the tax program that you
>>> had not imported into yet, save another copy of that and
>>> File->Import the revised .txf file.
>>>
>>>
>>> In cases where you wanted to see the tax lot info without entering a
>>> sell, the CaptitalGainsManager can let you do that. That is useful
>>> when you are thinking about selling and telling the broker which
>>> shares you want to sell in advance.
>>>
>>>>A better question is, "How do I get Money to calculate the cost basis of
>>>>the
>>>>100 shares of mutual fund I sold on July 1, 2007."
>>>>Also, if the FIFO principle determines that some of the 100 shares, but
>>>>not
>>>>all were purchased less than a year before the sale, which would make
>>>>the
>>>>proceeds short term capital gain, will the program tell me that also or
>>>>do
>>>>I
>>>>have to do that manually?
>>>>Dave
>>>>
>>

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