Cost Basis

As part of the Emergency Economic Stabilization Act of 2008, brokerage firms became responsible for reporting the cost basis of investments to the investment holder and the IRS on all 1099-B forms. The goal of the regulation is to ensure that investment gains and losses are reported accurately on your annual tax forms.

Brokerages have begun reporting cost basis for different types of securities in four phases:

  • Jan. 1, 2011 – equities
  • Jan. 1, 2012 – mutual funds, exchange-traded funds (ETFs), and DRIPs
  • Jan. 1, 2014 – less complex fixed-income and option securities
  • Jan. 1, 2016 – more complex fixed-income securities and options issued as part of a fixed-income instrument

The tracking and reporting changes give you a more complete and accurate assessment of your cost basis and can help simplify your year-end tax preparation. Keep learning about cost basis and how the law impacts your account below, and please contact your local Scottrade® team with any questions.

Cost Basis Education

Cost Basis FAQ

Cost Basis & Tax Lots

Calculating Gains & Losses

Tax Strategies

Setting a Tax Strategy

Adding an Acquisition Date to Non-covered Positions

Reporting for Fixed-Income and Option Securities

Words to Know

Cost Basis

Covered Positions

Non-Covered Positions

Capital Gains

Capital Losses

Tax Lot

Tax Lot Number

For more information about tax-related topics, visit the Tax Guide.