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For mutual fund shares sale, when calculating average cost, do I subtract capital gains distributions from the actual cost?>
The question pretty much says the whole thing:
I sold some mutual fund shares in 2019 that were acquired over many years. I will use the average cost method to calculate the gain to report.
Each year, I received monthly distributions to my account, which were automatically reinvested in new shares. Each year, part of the total distributions was ordinary dividends, and part capital gains distributions.
- Am I correct that those capital gains part of the distributions are "return of capital"?
- When calculating the average cost of the shares sold, do I subtract each year's capital gains distribution from that year's cost of new shares (automatically) purchased.
t
March 5, 2020
5:44 PM