Mutual Fund Basis Methods
For mutual funds, there are 4 basis methods approved by the IRS, detailed in Publication 564:
Cost basis methods:
- Specific share identification
- First-in, first-out (FIFO)
Average basis methods:
- Average cost single category (ACSC)
- Average cost double category (ACDC)
Starting in Jan 2012, broker/dealers are required to track cost basis on covered shares (shares purchased on or after 1 Jan 2012) and are required by law to offer at least the following 3 basis methods:
- Specific share identification (Spec ID)
- First-in, first-out (FIFO)
- Average cost single category
The following other methods are now available to be used as well:
- Highest-in, first-out (HIFO)
- Min Tax
- Max Gain
Read more about this topic: Cost Basis
Famous quotes containing the words mutual, fund, basis and/or methods:
“For do but note a wild and wanton herd
Or race of youthful and unhandled colts
Fetching mad bounds, bellowing and neighing loud,
Which is the hot condition of their blood;
If they but hear perchance a trumpet sound,
Or any air of music touch their ears,
You shall perceive them make a mutual stand,
Their savage eyes turned to a modest gaze
By the sweet power of music.”
—William Shake{peare (1564–1616)
“I am advised that there is an unexpended balance of about $45,000 of the fund appropriated for the relief of the sufferers by flood upon the Mississippi River and its tributaries, and I recommend that authority be given to use this fund to meet the most urgent necessities of the poorer people in Oklahoma.”
—Benjamin Harrison (1833–1901)
“The basis on which good repute in any highly organized industrial community ultimately rests is pecuniary strength; and the means of showing pecuniary strength, and so of gaining or retaining a good name, are leisure and a conspicuous consumption of goods.”
—Thorstein Veblen (1857–1929)
“The greatest part of our faults are more excusable than the methods that are commonly taken to conceal them.”
—François, Duc De La Rochefoucauld (1613–1680)