Mutual Fund Cost Basis

[Thomaston345]

This mutual fund was first opened in 1997 and I need to calculate the "Not Reported to the IRS basis".

I am adding any cash contributions plus from FORM 1099-DIV (1a) Total Ordinary Dividends and (2a) Total Gain Distributions (2a). Everything was reinvested.

My question is: Do I reduce the total by any amounts reported in (7) Foreign Tax Paid?

[DanP0428]

Your basis is the price on the day you purchased.  You do not add or adjust the basis.

[ErnieS0]

No. Do not reduce your cost basis by any foreign tax paid.

You are correct in computing your basis in a mutual fund where everything was invested. Your cost basis includes cash contributions plus reinvested dividends and capital gains. You will also have to subtract any return of capital.

See Cost Basis: Tracking Your Tax Basis

[Thomaston345]

I appreciate your response. As a follow-up question: Why when I compare the amounts from the activity on the yearly statements for dividends/capital gains the total amounts do not equal the 1099-DIV numbers unless I reduced them by the foreign tax paid?

@Thomaston345

[DaveF1006]

To clarify, are the numbers reflected on the yearly statements the 1099 DIV amounts in Boxes 1A and/or 1B minus the Foreign Tax paid?

@Thomaston345

[Thomaston345]

Yes the numbers on the yearly activity statements equal the 1099 DIV amounts in Boxes 1A and/or 1B minus the Foreign Tax paid. My question is do I just use what is on the statements which is the same as 1099 DIV amounts in Boxes 1A and/or 1B minus the Foreign Tax paid or just what is in Boxes 1A and/or 1B?

[DianeW777]

You should use the amount in Boxes 1A and 1B, less the foreign tax paid. These are the gross dividends that were reinvested and any amount paid for foreign tax was not accessible to be reinvested because they paid the foreign tax.

@Thomaston345