Computershare may be able to help you and your tax advisor find the information you may need

Internal Revenue Service regulations regarding the recording of cost basis of your securities MAY impact the way you report and track cost basis. We urge you to review the appropriate link below, and to seek advice from a tax advisor to assure you are reporting it properly. For example, the cost basis of certain "covered" transactions occurring after January 1, 2011, must be tracked and reported directly to the IRS by a financial intermediary, such as Computershare. The cost basis for these transactions will also be reported to you via a Form 1099.

With respect to 2010 and prior-year transactions, the cost basis of a security generally is the price you paid for the security. This information is needed to properly report gains or losses when you file a tax return or calculate the unrealized gain or loss from securities you have owned over a period of time. To determine the cost basis of such a security, you may use a history of the company's prices and corporate actions affecting share price – such as stock splits and mergers. To calculate the gain or loss you will also require information about the purchase and sale of the shares, such as buy/sell price, buy/sell date and number of shares sold.

Computershare is glad to help: Below are links to resources to help you determine the cost basis information you need for tax reporting, as well as a brief FAQ related to the new FATCA regulation affecting non-individual foreign holders.

FATCA Information

  • FATCA stands for Foreign Account Tax Compliance Act, which was signed into law as part of the Hiring Incentives to Restore Employment Act of 2010. Its primary intent is to identify US taxpayers who may be owners of income or assets held outside of the US.
  • If your account is registered as an individual, foreign or domestic, or as a United States entity with a valid W9, FATCA will NOT apply to you. If your account can be presumed to be based outside of the United States and it does not appear to be that of an individual, then you may be considered a foreign entity and you may be subject to 30% tax withholding for FATCA.
  • If you are subject to FATCA and your account was active and with us before July 1, 2014, then the soonest withholding may apply is January 1, 2015. If you open a new account on or after July 1, 2014, then withholding may apply immediately upon a payment to you on or after July 1, 2014.
  • Changing your registration to that of an individual, if it is not already, is one way. Also, there are new W8 forms being prepared by the IRS that you may be able to complete in order to clarify your holding status and potentially not be subject to FATCA. When these are available we will post information to our Tax Center for you to access.
  • There is quite a bit of information available on line regarding FATCA, including specifically at the IRS web site or by writing to the IRS, as there are quite a few circumstances to be aware of. We are unable to provide tax advice and suggest you seek such advice from a tax professional for your particular circumstance.

Cost basis FAQ

  • Cost basis generally refers to the original value (usually the purchase price) of a security for tax reporting purposes adjusted for various transactions that might occur after the purchase.
  • Shareholders have always been required to report cost basis on their individual tax returns. However, because of the Emergency Economic Stabilization Act of 2008, transfer agents such as Computershare must now report cost basis for certain types of securities acquired after January 1, 2011 (January 2012 for Mutual Fund Shares), to both the security holder and the IRS.
  • Computershare will send you an IRS Form 1099-B that reports the details of your sale. The same information will be sent to the IRS. In addition, for share transfers to brokers, Computershare will be required to furnish your broker with basis information on covered shares.
  • Covered means that transfer agents, such as Computershare, are required by the IRS to report cost basis to the individual and the IRS for such securities.
  • Any corporate stock and plan shares acquired on or after 1/1/2011 will be considered covered. Mutual Fund shares acquired on or after 1/1/2012 will also be covered. Noncovered shares are shares acquired prior to the cost basis regulations taking effect for that type of security, or for security types not yet called for under the law.
  • Adjusted cost basis represents the initial dollar value of a security adjusted as necessary for items that impact cost basis. 
    Examples of these include, but are not limited to, fees, corporate actions, return of capital payments, and wash sales.
  • Partial sales, transfers, and certificate issuances will be processed using the First In, First Out (FIFO) method, unless you tell us otherwise. There are no additional instructions required from you in order for us to process your transaction using the FIFO method.
  • If transacting on your entire position, cost basis reporting methods become irrelevant. Cost basis calculation methods are only used when there is a partial sale, transfer or certificate issuance by the holder. When a holder sells or transfers their entire covered stock position the basis for the entire position is provided.
  • Computershare recommends consulting with your tax advisor for information on cost basis and its impact to your specific situation.

    Acquisition Date
    Trade date of shares; can be an adjusted trade date based on wash sale trade date adjustments.

    Adjusted Cost Basis
    Represents the dollar cost of a share lot acquisition adjusted as necessary for fees, corporate actions, return of capital payments, reinvested dividends, wash sales and other processing with impact to cost basis.

    Average Cost
    Cost basis calculation method where the cost of all share lots is totaled and divided by the number of shares, all with the same CUSIP, in an account to determine the average cost per share. Generally this only applies to Mutual Fund shares.

    Awaiting Cost Basis Status
    Shares received from broker without cost basis [i.e. date/price]. Broker has 15 days to provide cost basis.

    Cost Basis (also Tax Basis)
    The original value of an asset for tax purposes (usually the purchase price), adjusted for stock splits, dividends and return of capital distributions. This value is used to determine the capital gain.

    Constructive Receipt
    Transaction is reportable at the time of the effective date shareholder exchanges his/her shares.

    Covered Securities / Covered Shares
    Investments for which mandatory cost basis reporting is required under the legislation. The timeline for this is: Corporate Stock and plan shares acquired after 1/1/2011; mutual fund shares acquired after 1/1/2012; and all other securities acquired after 1/1/2013.

    Double Category
    At the time of sale or transfer, shares are aggregated by long term and short term holding periods and separate average costs are calculated for each aggregated group. The proposed regulations have eliminated this as a basis determination method.

    Average Cost
    The price that a given property or asset would be valued at in the marketplace.

    Fair Market Value (FMV)
    Cost basis calculation method where the first shares purchased in an account are the first shares sold from that account.

    First In First Out (FIFO)
    Ordering of disposition of shares must take holding period revisions for wash sale acquisitions into account.

    Highest Price First Out (HIFO)
    Cost basis calculation method where the shares with highest price purchased in an account are the first shares sold from that account.

    Holding Period
    The amount of time elapsed between the acquisition of shares and the disposal (i.e. sale or transfer) of the same shares.

    Last In First Out (LIFO)
    Cost basis calculation method where the last shares acquired in an account are the first shares sold from that account.

    Long Term Gain / Loss
    A gain or loss from a qualifying investment owned for longer than 12 months and then sold. The amount of an asset sale that counts toward a capital gain or loss is the difference between the sale value and the adjusted cost basis.

    Lot (also Share Lot)
    A group of shares associated with a single purchase/reinvest or transfer transaction. Shares in a lot share key data elements such as acquisition date and share price, including basis adjustments.

    Lowest Price First Out (LOWFO)
    Cost basis calculation method where the shares with the lowest price acquired in an account are the first shares sold from that account.

    Non-Constructive Receipt
    Transaction is reportable in the tax year that the shareholder exchanges his/her shares and receives an actual payment.

    Noncovered shares (Uncovered)
    Shares obtained prior to cost basis timeframe for that class. [Example: Corporate Stock and plan shares acquired before 1/1/2011, mutual fund shares acquired before 1/1/2012, and all other securities acquired before 1/1/2013].

    Return of Capital (ROC)
    A distribution of capital that is not deemed by the issuer to be ordinary income. Return of Capital cost basis may be re-evaluated by the issuer months after a payment is made.

    Short Term Gain / Loss
    A gain or loss from a qualifying investment owned equal to or less than one year and then sold. The amount of an asset sale that counts toward a capital gain or loss is the difference between the sale value and the adjusted cost basis.

    SIFMA
    Securities Industry and Financial Markets Association.

    Single Category Average Cost
    At the time of sale or transfer, share lots are depleted using the FIFO method to determine long term and short term gains or losses.

    Specific Lot Identification
    Cost basis calculation method where the shareholder selects which share lots to sell or transfer when initiating a transaction and such selection is confirmed by the broker/agent to the shareholder in writing.

    Wash Sale Rule (30-Day Wash-Sale Rule)
    An Internal Revenue Service (IRS) rule prohibiting a taxpayer from claiming a loss on the sale of an investment when the same investment, or any portion of it, was purchased within 30 days before or after the sale date.

NetBasis

Computershare is pleased to work with NetBasis, a Web-based service, to provide historical share price and corporate action information for many securities and mutual funds going back to 1925.

NetBasis contains information and tools to assist shareholders and financial professionals with information related to the cost basis of shares. Information is available for most stocks.

Continue to NetBasis


Note: NetWorth Services, Inc., a software company unaffiliated with Computershare, provides a software product named NetBasis that calculates cost-basis information. NetBasis incorporates changes caused by stock splits, mergers and corporate actions, using it to deliver adjusted cost basis information. Networth Services charges a fee to obtain this information. Click on the "Continue" link below if you wish to obtain such information. You will need to input either the common stock CUSIP number, or the ticker symbol.

You will be charged a fee for this service. Fee information is posted on the NetBasis website. NetBasis is not appropriate for calculating the cost basis of shares acquired through the demutualization of an insurance company. If you received your shares through a demutualization, please refer to the Company-Provided Information below or call the number shown on your account statement.

Computershare's Investor Center Website

If you are a shareholder of a Computershare-administered dividend reinvestment plan, you may access your statements and tax documents through Computershare’s Investor Centre website. The Investor Centre website also is a resource to find historical stock prices for companies that are Computershare clients.

View Investor Center website

Computershare's Employee Plan Participant Portal

If you acquired shares through a Computershare-administered Employee Stock Purchase Plan (ESPP) or Stock Options Plan, you may access statements and tax documents through Computershare’s Employee Plan Participant Portal.

Note: If you are looking for cost basis information for an ESPP or Option Plan not managed by Computershare, please check with your plan administrator or tax professional for assistance.

Disclaimer: The information contained herein is general in nature and is subject to change. Computershare believes the information contained in this publication is obtained from reliable sources. Information in this communication is not intended as tax, legal or financial advice. Readers should not rely on this information but should consult with their advisors for specific tax, legal or financial advice with respect to their cost basis and/or tax reporting.

NetBasis is a trademark of The Depository Trust & Clearing Corporation and NetWorth Services, Inc. >Investor Centre is a trademark of Computershare.