Mutual Funds (Costs, Distributions, etc.)
Question: How do I calculate the average basis for the sale of mutual fund shares?
In order to figure your gain or loss using an average basis:
- You must have acquired the shares at various times and prices, and
- You must have left them on deposit in an account handled by a custodian or agent who maintains an account for the acquisition or redemption of these shares.
To calculate average basis:
- First, add up the cost of all the shares you own in the mutual fund.
- Divide that result by the total number of shares you own.
- This gives you your average per share. Multiply that number by the number of shares sold.
You may no longer use the double-category method for figuring your average basis. If you were using that method for shares you acquired before April 1, 2011 and you sell, exchange or otherwise dispose of those shares on or after April 1, 2011, you must figure the average basis of those shares by averaging together all identical shares in the account on April 1, 2011, regardless of holding period.
Category: Capital Gains, Losses, Sale of Home
Subcategory: Mutual Funds (Costs, Distributions, etc.)