About fifteen years ago, I put $50,000 into a mutual fund created through a brokerage connected to my credit union. After a while, it was automatically transferred to LPL and sold. The funds’ early years are not documented by me, and LPL’s records are limited to a few years’ worth of information.
Today, these assets are valued at $150,000. With such limited information, how would I calculate the Cost Basis if I wanted to sell them?
Do you not have an advisor at LPL? Ask one of their personnel to look into it. Yahoo Finance frequently provides ticker prices dating back several decades, and advisors can also get in touch with mutual fund companies directly. Sure, you could follow suit, but I didn’t know LPL permitted self-managed accounts.
You can try reaching out to the mutual fund directly, they may have the records. I experienced something similar with my employee stock purchase plan. The company worked with multiple brokerages while I was acquiring shares, resulting in two accounts one with Computershare and one with Fidelity. I chose to transfer the Computershare account to Fidelity, but the purchase records were lost during the transition. Although no shares were sold, the purchase information was gone. I had to contact my former employer to retrieve that information, and getting it updated in my Fidelity account was a lengthy process.
The lesson learned, always obtain a copy of the purchase records before transferring shares between brokerages.
Go to library business section look for printed documents. Most go back to 60s.
If you have not realized any gains, your cost basis would be that original $50,000, or at least close enough without additional information. You can confirm this by backtesting the funds you held with that initial investment of $50,000.
You are right, unless gains are realized, the cost basis is the initial sum. Have you tested it with a backtest?
However, wouldn’t dividend payments be regarded as realized?
You just need to make an informed estimate based on the information available. According to the IRS, if you know the year the shares were purchased, you can find the net asset value (NAV) around the time of your purchase. You would then use that value as your cost basis for tax purposes.
If I am correct, reinvested dividends also increase the cost basis. Is there a method to estimate those?
The original shares’ cost basis remains unaffected. The cost foundation of each reinvestment would differ depending on when it was made.