FAQ

Q: What is “cost basis?”

When you sell a security, such as shares in a company or a mutual fund, you must report the capital gains as taxable income. Capital gains are the difference between what you paid for the security and what you sold it for. What you paid for the security is called the “cost basis.”

Q: What is a “cost basis calculator?”

Sometimes it is easy to figure out the cost basis, especially if you recently acquired the security. The basic cost basis calculation is (# of shares) x (price paid per share). This calculation is what most simple “cost basis calculator” software programs perform.

However, if you have owned the security for many years, the complexity of its history can make the cost basis more difficult to calculate. Other factors that can complicate the cost basis calculation include purchasing the shares through a systematic investment plan, dividend reinvestments, mergers, acquisitions and stock splits. It can also be challenging to determine the cost basis of inherited or gifted shares, where historical information may be sparse or nonexistent.

Fortunately, help is available through Netbasis, the gold standard of cost basis calculators – the one others try to measure up to.

Netbasis takes the simple cost basis calculation and automatically factors in all the things that can complicate your calculation, such as corporate events, systematic investment and withdrawals and dividend reinvestments. Netbasis can go back to 1925 to find the historical prices for your security. It can tell you the value of gifted and inherited shares, even though you don’t know the company’s current name. Netbasis lets you test out different sales methods (such as FIFO and LIFO) and see the effect on your gains and losses. You can also do “What If” scenarios with different sales and tax variables to find out which tax lots are the most beneficial to sell.

Q: What features does Netbasis offer?

Netbasis includes the following features:

• Equity Cost Basis: Enter individual transactions for your stock, such as Buy, Sell, Sell All and Valuation.
• Equity Historical Prices: Display unadjusted daily, monthly and annual pricing.
• Equity Date of Death Values: Calculate the Fair Market Value of a position on both the date of death and the alternative valuation date (six months after the date of death).
• Equity Gift Valuation: Determine the value of shares that have been gifted, as well as the cost basis if any or all of the shares were sold.
• Equity Power Search: Calculate the original cost basis of shares if you know the current position.
• Equity Corporate Action Look-up: View dividend action and non-dividend corporate events such as splits, spin-offs, name changes and mergers.
• Mutual Fund Cost Basis: Enter individual transactions for your mutual fund.
• Mutual Fund Historical Prices: Display unadjusted daily, monthly and annual pricing.
• Mutual Fund Date of Death Values: Calculate the Fair Market Value of a position on both the date of death and the alternative valuation date (six months after the date of death).
• Mutual Fund Gift Valuation: Determine the value of a mutual fund that has been gifted, as well as the cost basis if sold.
• Mutual Fund Power Search: Calculate the original cost basis of shares if you know the current position.
• Bond Price: Calculate the bond price on a given date.
• Bond Date of Death Values: Calculate the Fair Market Value of a position on both the date of death and the alternative valuation date (six months after the date of death).

Q: What is a Netbasis transaction?

The results of one Netbasis transaction vary depending on what you would like to do:

• Equity/Mutual Fund Cost Basis: A transaction consists of entering any number of purchases and/or sales as well as any dividend information for one specific security. The result will provide you with the corporate actions events, dividend pricing, and number of shares owned, as well as total cash value and cost basis from the date of purchase through the sale/date of last upload.
• Historical Prices: A transaction consists of entering one date and then choosing the unadjusted high/low/average of the day, month or year. The result will provide you with anywhere between 1 and 31 days of information.
• Date of Death: A transaction consists of entering the number of shares as well as the date of death. The result will provide you with the price per share and the total amount the shares were worth on the date of death.
• Gift Valuation: A transaction consists of entering the number of gifted shares, date of the gift, dividend information, and the donor’s cost basis at the time of the gift. If the donor’s cost basis is not known, the original purchase date as well as the security purchased is required.
• Power Search: A transaction consists of entering the name of the security you are looking for the origin of, the number of shares currently owned/recently sold, the date you owned the shares previously entered, and the original purchase date. Then you will choose the origin security which the system has chosen based on the dates and information given. You must also enter any sales that have taken place since the initial purchase as well as any dividend information.
• Corporate Action Look-Up: A transaction consists of choosing either a dividend or non-dividend list of corporate action events and entering the name of the security you would like to search.

Q: If I don’t have the complete purchase date, can I still use Netbasis?

Yes. Netbasis allows you to enter a partial purchase date into the system. If all you have is the year or month and year but not the day of a purchase, you can enter that into the system and Netbasis will calculate an adjusted cost basis using the average of the high/low price for the year and/or month.

Q: My stock experienced splits and mergers. Do I need to know that information in order to use Netbasis?

No. Netbasis will automatically account for any corporate activity that happened while you owned your stock and adjust the cost basis and shares accordingly.

Q: What securities does Netbasis cover?

Netbasis covers the pricing of publicly traded stocks and mutual funds on the NYSE, AMEX and NASDAQ exchanges going back as far as 1925 with corporate actions drawing back to 1962. It also provides some bond data, as well as data on some foreign stocks that trade on the US exchanges.

Q: I’m trying to figure out my cost basis and need information/pricing for my accountant. Can Netbasis help me?

Yes. Netbasis will calculate your cost basis and provide per share or total pricing, sales proceeds, capital gains/losses, and adjusted number of shares. It will also adjust for corporate events and reinvested dividends.

Q: What kind of web browser do I need to use?

Netbasis works best with Internet Explorer 7.0 or 8.0, but is also compatible with Firefox, Safari and Chrome.

Q: Can I include a purchase for a parent company of a stock?

Multiple purchases and sales can be entered in one transaction; however, they must involve the same stock.

Q: I am having trouble with the purchase process. My credit card isn’t being accepted even though I know it’s OK. Why is this happening?

Make sure the address you listed as your contact in Netbasis is the same as the billing address for the credit card you are trying to use. If they don’t match, the card will be rejected.