Didn't have cost basis but do now for a closed year

[TaxesAreComplex]

What would happen if I didn't have the cost basis for a specific year, let's say 2017, but I sold some Undetermined Noncovered Tax lots, and I put $0 as the cost basis. I can determine the cost basis for the funds now and want to sell the funds in the future. Can I correct it by simply using the total of the cost basis for all shares?

Example: Bought 2 shares for $10 each in 2015. Sold 1 $20 share in 2017, reported $0 cost basis. In 2025, I sell 1 share for $40, can I use cost basis of $20 to average out my cost basis across the shares or do I need to stick with my $10 cost basis?

I saw something about a form 3115, but I am not entirely sure if that applies here as it is for an individual not a corporation. TYIA

[DavidD66 · Accepted solution]

No you cannot include the cost basis for the shares you sold in 2017 in the cost basis for shares you sold in 2024 (or any other year).  In your example, your cost basis is $10 per share and that is what you have to use for your remaining share.  Form 3115 would not apply to this situation.  This is not a change in accounting method.  Your remedy would have been to file an amended return, but it is too late to file an amended return and receive a refund for a timely filed 2017 tax return.  

[TaxesAreComplex]

Wonderful, thank you for the clarification, was really hoping that wasn't the case, but oh well.