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:
“Every nation ... have their refinements and grossiertes.... There is a balance ... of good and bad every where; and nothing but the knowing it is so can emancipate one half of the world from the prepossessions which it holds against the other—that [was] the advantage of travel ... it taught us mutual toleration; and mutual toleration ... taught us mutual love.”
—Laurence Sterne (1713–1768)
“School success is not predicted by a child’s fund of facts or a precocious ability to read as much as by emotional and social measures; being self-assured and interested: knowing what kind of behavior is expected and how to rein in the impulse to misbehave; being able to wait, to follow directions, and to turn to teachers for help; and expressing needs while getting along with other children.”
—Daniel Goleman (20th century)
“Even upon such a basis hast thou built
A monument, whose cement hath been guilt!”
—George Gordon Noel Byron (1788–1824)
“If you want to know the taste of a pear, you must change the pear by eating it yourself.... If you want to know the theory and methods of revolution, you must take part in revolution. All genuine knowledge originates in direct experience.”
—Mao Zedong (1893–1976)