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by Kon-Peki
978 days ago
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Cost basis is not so cut and dry. In fact, the IRS (federal law?) allows you to use almost any reasonable method for determining it as long as you are consistent. An example of where the brokerage wouldn't know: You buy 5 shares of stock at $X and then a few months later buy 6 more shares at $Y. Later on you sell 3 shares for $Z. What is your cost basis? It could be $3X or it could be $3Y. Or maybe a blend of the two $(2X + Y)! The IRS thinks that you should be the one to decide, not the brokerage. |
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