NoLoad FundX editor Janet Brown shared some useful cost basis information in her post on the Forbes Intelligent Investing blog, What Mutual Fund Investors Need to Know about the New 2012 Tax Rules. Janet explained how cost basis reporting will change in 2012, and how investors can prepare for these changes.
“Most custodians will default to the average cost basis method when they begin reporting next year – unless you tell them otherwise,” Janet wrote. But there are other cost basis options and Janet looked at five common cost basis methods, including average cost, first in first out, last in first out, highest in first out and lowest in first out, and she explained some of the advantages and disadvantages of each method.
(To read all of Janet’s posts on the Forbes Intelligent Investing blog, click here).