How to Determine the Cost Basis for a Stock to Sell
The cost basis of a stock is the amount you pay when you purchase a stock, including commissions and other fees (see reference 1). The most important use of cost basis is for computing your tax liability when you sell a stock, as the proceeds of your sale less your cost basis equals your capital gain or loss (see reference 2). Thus, being able to determine your cost basis is important for any investor.
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Instructions
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1
Look at your account statements. Most financial services firms will list your cost basis for you on your monthly statements, or at the very least, on your year-end statements. If you have bought your stock at more than one time, your cost basis will be listed for each individual lot. If you intend to sell your complete position, this is not as important, but if you are going to sell distinct lots for tax purposes, this information is vital. For example, you might have a position which is at a net loss, but one or more of your purchases might actually be at a gain. If you are attempting to take a tax loss, in this case, it would not make sense to sell the tax lot which is trading at a gain.
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2
Check your account online. If your account has online capability, you should be able to get your cost basis here as well. If your basis is not listed next to your individual positions, scroll through your account activity until you find the date where you bought the stock.
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3
Contact your financial and tax advisers. If you are having trouble finding your cost basis on your own, one of your financial representatives may have this information in their files.
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4
Check your own records. If you bought stock at one firm and transferred it to a new firm, you might have to rely on your own original trade confirmations as a record of your cost basis. While your previous firm may have records in their files, over time these records are deleted--and depending on how you left the firm, they may also be reluctant to help you. You should always keep a copy of your trade information until you sell your stock and file your taxes, at the very least.
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5
Use historical pricing data. If no records of your cost basis are obtainable at all, estimate when you purchased the stock--or use the exact date if you have it--and look up the price range for the stock at that time. While you will not get an exact cost basis for your stock, you should be able to create a fairly accurate estimate.
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