Cost Basis

As part of the Emergency Economic Stabilization Act of 2008, brokerage firms became responsible for reporting the cost basis of investments to the investment holder and the IRS on all 1099-B forms. The goal of the regulation is to ensure that investment gains and losses are reported accurately on your annual tax forms.

Brokerages have begun reporting cost basis for different types of securities in four phases:

  • Jan. 1, 2011 – equities
  • Jan. 1, 2012 – mutual funds, exchange-traded funds (ETFs), and DRIPs
  • Jan. 1, 2014 – less complex fixed-income and option securities
  • Jan. 1, 2016 – more complex fixed-income securities and options issued as part of a fixed-income instrument

The tracking and reporting changes give you a more complete and accurate assessment of your cost basis and can help simplify your year-end tax preparation. Keep learning about cost basis and how the law impacts your account below, and please contact your local Scottrade® team with any questions.

Cost Basis Education

Cost Basis FAQ

Cost Basis & Tax Lots

Calculating Gains & Losses

Tax Strategies

Setting a Tax Strategy

Adding an Acquisition Date to Non-covered Positions

Reporting for Fixed-Income and Option Securities

Words to Know

Cost Basis

Covered Positions

Non-Covered Positions

Capital Gains

Capital Losses

Tax Lot

Tax Lot Number

For more information about tax-related topics, visit the Tax Guide.

The information and content provided in the Scottrade® Knowledge Center is for informational and/or educational purposes only. The information presented or discussed is not, and should not be considered, a recommendation or an offer of, or solicitation of an offer by, Scottrade or its affiliates to buy, sell or hold any security or other financial product or an endorsement or affirmation of any specific investment strategy. You are fully responsible for your investment decisions. Your choice to engage in a particular investment or investment strategy should be based solely on your own research and evaluation of the risks involved, your financial circumstances and your investment objectives. Scottrade, Inc. and its affiliates are not offering or providing, and will not offer or provide, any advice, opinion or recommendation of the suitability, value or profitability of any particular investment or investment strategy.