Understanding Cost Basis Reporting Changes
New rules concerning cost basis reporting mean some of the biggest changes for individual taxpayers in more than 20 years.
- Details on the new reporting rules.
- A calendar showing which of your securities will be affected, when.
- A demo of the potential tax impact of each cost basis method.
- An interactive demo of the redesigned Form 1099 Composite.
- FAQs about cost basis reporting.
Cost Basis Overview
Learn what you need to consider now and what to expect next year.
How Your Cost Basis Gets Calculated
Learn reasons why cost basis could change through settlement date.
Revised 1099 and Year-End Summary
Revised year-end tax reports that can help make tax preparation easier.
Year End Reports for Tax Year 2011
Register to walk through changes to your year-end tax reports.
How Schwab will report Wash Sales
Register to hear, in depth, on how Wash Sales work.
Frequently Asked Questions
- January 1, 2011 for Equities
- January 1, 2012 for Mutual Funds, ETFs and Dividend Reinvestment Plans ("DRIPs")
- January 1, 2013 for other securities (including Fixed Income and Options)
- Determine where the security was purchased.
- Review your original statements or confirmations or request them from the purchasing broker.
- Check your past statements and trade confirmations for the original purchase dates and prices.
- Contact the broker who transferred your securities to Schwab.
- Research historical prices online.
- Use your search engine to find other sources to help calculate cost basis.
- If you are unable to obtain the original purchase information, consult a tax advisor for suggestions on how to proceed.
There are three consequences of a wash sale:
- The loss on your sale is disallowed (deferred).
- The loss is added to the cost basis of the replacement shares/purchase.
- The holding period for the new shares includes the time you held the original shares plus the number of days you did not hold shares.
See more cost basis FAQs >
The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your professional adviser. This article does not necessarily represent the views or professional advice of KPMG LLP.
KPMG LLP is not affiliated with Schwab.
Because these new reporting requirements could impact the cost basis used to compute your taxable gains and losses, it’s important to understand when and how they will apply to you. The information in this video is intended as informational only and is not individualized tax advice. Schwab does not provide tax advice and encourages you to consult with your tax professional to understand how the new reporting requirements will affect you and your tax situation.
For covered securities that were not both purchased and sold at Schwab, Schwab calculates cost basis using data that we have obtained from third-party sources such as your prior custodian or another third-party source. Therefore, the accuracy of the basis reporting Schwab performs is dependent on the data we receive from these third-parties. If we are not provided with adequate information to report cost basis data for covered securities that were not both purchased and sold at Schwab, those securities will be considered uncovered and the cost basis will not be reported to the IRS even if the securities sold were acquired after the effective date for cost basis reporting.