Reporting Mutual Fund Share Sales

You have several methods to choose from to report the sale of mutual fund shares.

Keep in mind that once you choose a method to use for a specific fund, you must stick with that method as long as you own shares of that mutual fund. However, you can use different methods for different mutual funds that you own.

Also, when figuring the basis of your mutual fund shares, don’t forget to include these amounts:

• Reinvested dividends

• Reinvested capital gain distributions

• Net undistributed long-term capital gains

• Previously reported wash sales

Average basis

This is the average cost of all the shares you purchased. To learn more, see Average Basis Method.

First in, first out

With this method, you assume that the shares you sold were the first ones you bought. To learn more, see First In, First Out.

Specific share identification

With this method, you identify the actual shares you want to sell to minimize your capital gain or maximize your loss. To learn more, see Specific Identification Method.

Keep in mind that once you choose a method to use for a specific fund, you must stick with that method as long as you own shares of that mutual fund. However, you can use different methods for different mutual funds that you own.

For more information, see Publication 564: Mutual Fund Distributions.