Mutual Fund Cost Basis

Mutual Fund Cost Basis

Here's a sample spreadsheet I created using a typical mutual fund scenario. Our hypothetical shareholder invested $10,000 in a large, well-known mutual fund on September 3rd, 2004, and subsequently made additional monthly investments of $250 on the first of each month. The mutual fund distributed dividend income, which the shareholder reinvested. The cost basis using the specific identification method is shown. Also, the holding periods are shown as of October 2005.

Our hypothetical investor may want to sell all, some, or none of her shares. However, knowing the cost basis is crucial to figuring out the potential capital gains. If the investor is going to sell some of her shares, she will use one of the four accounting methods for calculating capital gain on mutual fund shares.

Actual Cost Basis using Specific Identification
Buy Date	Buy Price	No. Shares	Comment	Cost Basis Per Share	Holding Period
09/03/04	10,000.00	382.56	Initial investment	26.14	LT
09/24/04	34.43	1.32	Reinvested dividends	26.11	LT
10/01/04	250.00	9.38	Additional investment	26.65	LT
11/01/04	250.00	9.36	Additional investment	26.72	ST
12/01/04	250.00	8.82	Additional investment	28.35	ST
12/23/04	78.17	2.73	Reinvested dividends	28.68	ST
01/03/05	250.00	8.78	Additional investment	28.49	ST
02/01/05	250.00	8.87	Additional investment	28.19	ST
03/01/05	250.00	8.70	Additional investment	28.75	ST
03/23/05	48.45	1.74	Reinvested dividends	27.78	ST
04/01/05	250.00	8.99	Additional investment	27.81	ST
05/02/05	250.00	9.10	Additional investment	27.47	ST
06/01/05	250.00	8.74	Additional investment	28.62	ST
06/24/05	42.22	1.49	Reinvested dividends	28.42	ST
07/01/05	250.00	8.74	Additional investment	28.59	ST
08/01/05	250.00	8.41	Additional investment	29.72	ST
09/01/05	250.00	8.49	Additional investment	29.44	ST
10/03/05	250.00	8.47	Additional investment	29.51	ST
Subtotal	13,453.27	504.67
Average cost basis for all shares				26.66