Cost Basis For Mutual Funds

Simplifying Mutual Fund Cost Basis Complexities While Enhancing Service

Netbasis offers the functionality mutual fund companies need to meet the complex challenges posed by new cost basis reporting legislation. It provides highly accurate cost basis calculation that addresses the complexities inherent in mutual fund cost basis accounting due to factors such as:

  • Multiple purchases/sales within individual accounts
  • Frequent distributions
  • Loads and management fees

At the same time, Netbasis enhances customer service by enabling mutual fund companies to:

  • Provide current cost basis information for all positions in a customer’s account, including those acquired before the legislation’s effective date
  • Put powerful portfolio management capabilities into the hands of customers, including a tax optimization tool for running “what if” and tax lot relief scenarios around the various lot accounting methods (e.g., LIFO, FIFO, specific lot)
  • Deploy Netbasis in call centers to assist customers with phone inquiries

Comprehensive Compliance

Netbasis provides mutual fund companies with a full range of essential compliance capabilities, including:

  • Support for FIFO, specific lot and average cost lot relief methods
  • Correct accounting for B to A share class conversion, as well as other share class exchanges into which contingent deferred sales charges, redemption fees and 12b-1 fees must be factored
  • Proper handling of wash sale adjustments
  • Accommodation of all applicable IRS rules on gift shares and date of death valuation
  • Verification/correction of cost basis information of older share lots received from other financial intermediaries
  • Delivery of cost basis-related information to counterparties within 15 days of a customer account transfer

Implementation Options

Offering a variety of implementation options, Netbasis can provide high-volume batch processing for one-time, periodic or ongoing cost basis reconstruction/verification and feeding of tax systems or Form 1099-b cost basis reporting applications. Netbasis can also host data, serve as a desktop resource for call center agents, or be offered directly to shareholders via the Internet. Contact a Netbasis sales professional to discuss the implementation options available to mutual funds and dealers.

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