Cost basis for reinvested dividends

If you reinvest dividends on a stock and the broker charges a fee for reinvestment, is the fee part of the cost basis for the stock? For example, if the dividend is $100 and the fee is $1, $99 is used to buy shares in the reinvestment plan. Would $100 be added to the cost basis for the stock or would it be $99?

Thanks for any help!

446

Level 15

Sep 16, 2022 2:09:56 PM

@fanfare is correct. (As usual)!

Level 15

Sep 16, 2022 3:37:11 PM

commissions and fees are part of your cost basis.

Your basis is $100 even though you got $99 worth of stock, as of that moment.

However, it being a covered transaction, the broker is going to calculate and record your basis of reinvested dividends.

You have to ask them for the answer to your question.

@WinstonS

Level 2

Sep 16, 2022 5:53:11 PM

Thanks for the response. It's a non-covered stock so the broker isn't tracking the basis.

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Cost basis for reinvested dividends