California HSA capital gains & 1099: "I transferred a form 1099 for health equity from 2016 but not 2017" health equity is not showing capital gains info in any form.

[David36]

In California you need to declare dividends and capital gains of investments on HSA accounts.

Calculating dividends is pretty easy. The problem is calculating the capital gains of sold investments: HealthEquity (HE) does not report cost basis of sales...I don't know which stocks were sold?? Is it my responsibility to maintain a spreadsheet and calculate this myself according to whichever method I prefer (first in first out/first in last out)...this doesn't really makes sense: it seems like HE should get this information to me.

Just spent half an hour just to be told that they are not tax accountants. To which I replied that they are my financial institution and they should report this info to their customers...

[BMcCalpin]

Did you initiate the stock purchases in the HE HSA account? In that case, you should have the paperwork for what the cost was (which becomes the basis for sale). Note that HE is not a normal financial institution in that their customers in 47 states do not have this problem (of tracking capital gains) because all gain is deferred and then when spent on qualified medical expenses, it's tax-free anyway.

But if you invested in a mutual-fund-like-thing inside the HSA, then it is the mutual fund manager who tracks cost and sales price. 

In the latter case, I would expect the fund to report the net capital gain to you so you won't have any record-keeping to keep. I see that HE allows you to invest in mutual funds; surely the fund is reporting the net capital gains to HE to pass to you.

[David36]

Those are Vanguard VSIAX, VVIAX and VMVAX. Are you saying that Vanguard should have sent me tax documents?

[CalUser]

@David36 I have the same problem, how did you manage to report this? Appreciate your response.

[BillM223]

@CalUser

I, too, am curious how it turned out (although this conversation is surely a year old).

As I noted above, taxpayers in California and New Jersey have to find a way to get this information from the HSA custodian. If the custodian is not set up to handle the reporting requirements of taxpayers who live in those two states, then it's time to look for an HSA custodian who can handle it.

[CalUser]

I contacted HealthEquity and they pointed this tool to calculate gain or loss: https://learn.healthequity.com/investment-income-calculator

We can choose average or FIFO cost basis.

[BillM223]

@CalUser

Thanks for the report - I hope other California users see this.

[Yingcredible]

This investment income calculator link is throwing an error. Is there a new link?

[CalUser]

It still works for me with no problems, please check again.