To calculate average basis:
- Add up the cost of all the shares you own in the mutual fund.
- Divide that result by the total number of shares you own. This gives you your average per share.
- Multiply the average per share by the number of shares sold.
What is the cost basis of a fund?
In its broadest sense, cost basis refers to the price you paid for your shares. That figure is adjusted upward for reinvested dividends and capital gains and any commissions or transaction fees you paid.
How is the cost basis of a mutual fund calculated?
FIFO is also calculated individually leaving them with their own cost basis. Mutual fund shares can also use an average cost option. This method allows investors to divide the total number of shares they have by the gains made, and the reinvested dividends. Splitting up the method into a single, or a double category also works.
How is the average cost basis method calculated?
What is the ‘Average Cost Basis Method’. The average cost basis method is a system of calculating the value of mutual fund positions held in a taxable account to determine the profit or loss for tax reporting. The average cost is calculated by dividing the dollars invested in a mutual fund position by the number of shares.
How is FIFO calculated for a mutual fund?
FIFO is also calculated individually leaving them with their own cost basis. Mutual fund shares can also use an average cost option. This method allows investors to divide the total number of shares they have by the gains made, and the reinvested dividends.
How do you calculate cost basis of shares?
To do this, you’ll need to specify one of these cost basis methods at the time of sale: Average Cost – an average of the total purchase cost divided by the total shares held. This is only available for funds. LIFO – or Last In, First Out sells shares in the most recent lot ID first.
