How to See Cost Basis of Sold Stock Fidelity

Understanding the cost basis of your sold stocks is crucial for accurately reporting gains or losses during tax season. If you are using Fidelity as your brokerage, determining the cost basis of sold stock can initially seem daunting, but with the right guidance, it becomes a straightforward process. This article will provide you with a comprehensive guide on how to see the cost basis of your sold stocks on Fidelity. Let's dive into the essential steps, examples, and additional considerations you'll need to effectively manage and understand your investment portfolio's tax implications.

Understanding Cost Basis

The cost basis of an investment refers to the original value of an asset for tax purposes, adjusted for stock splits, dividends, and return of capital distributions. Understanding your cost basis is essential because it helps determine the capital gains tax you may need to pay. The capital gains or losses are calculated by subtracting the cost basis from the selling price of the stock.

Types of Cost Basis

1. Original Purchase Price: This is the simplest form, where your cost basis is the purchase price of the stock, including any commissions or fees.

2. Adjusted Cost Basis: This involves adjustments for stock splits, dividends, and other corporate actions that affect the price of your shares.

3. Average Cost: Commonly used for mutual funds, this method averages the cost of all shares based on total dollars invested.

4. FIFO (First In, First Out): The first shares purchased are assumed to be the first shares sold.

5. Specific Identification: Allows an investor to choose specific shares to sell in order to manage tax implications.

Accessing Cost Basis Information on Fidelity

Steps to View Cost Basis

Navigating through Fidelity’s platform to find your cost basis can be done by following these steps:

1. Log into Your Fidelity Account

   • Visit Fidelity Investments and log in using your username and password.

2. Access the Accounts & Trade Menu

   • Once logged in, hover over or click on the 'Accounts & Trade' tab to reveal a drop-down menu.

3. Select the Account Holding the Sold Stock

   • Your different accounts (e.g., brokerage, retirement) will be displayed. Select the account that contains the transaction history of the sold stock.

4. View Transaction History

   • Within your account summary, find and select the 'Transaction History' option. This section includes buying and selling activity for the account.

5. Filter for Sold Stock

   • Use the filtering options to select a specific range or search for a particular stock. Inputting specific details of the sale, such as the sale date, will refine your search.

6. Review Cost Basis Information

   • Upon finding the specific sale transaction, the details typically display the sale's amount, number of shares, and cost basis.

Viewing Detailed Cost Basis

The basic cost basis can sometimes be insufficient for complex tax scenarios. Fidelity also provides a more comprehensive view:

7. Click on Cost Basis Details

   • After navigating to the specified transaction, there should be an option like 'View Cost Basis Details' that you can select for detailed insights.

8. Explore Additional Tools

   • Fidelity offers tools to navigate multiple cost basis methods (e.g., FIFO, average cost) under the 'Accounts & Trade' page, allowing you to choose the one that best matches your financial strategy and tax needs.

Table: How Different Cost Basis Methods Compare

Examples of Cost Basis Application

Understanding these features in isolation might still leave questions. Let's explore illustrations for clarity:

• Example 1: Suppose you bought 100 shares of Company ABC at $50 each, with a commission of $10. Your cost basis would be ((100 imes 50) + 10 = 5,010) dollars.

• Example 2: If there's a 2-for-1 stock split and a $5 dividend per share, the cost basis would adjust. The shares double to 200, and the price adjust to $25, with dividends increasing the basis cost.

• Example 3: Selling 50 shares at $70 per share using FIFO – The first 50 shares bought at $50 have a cost basis of $2,510. Selling would yield a capital gain of ((70 imes 50) - 2,510 = 1,490) dollars.

Common Questions and Misconceptions

1. Does Fidelity automatically calculate my cost basis?

   • Yes, Fidelity automatically provides a cost basis, but it's essential to verify and understand, especially for accurate tax reporting.

2. What if Fidelity's cost basis doesn't match my records?

   • Recheck purchase records and consider all corporate actions. Manual adjustments may be necessary, and it might be beneficial to consult with a tax advisor.

3. Why does my cost basis need adjustment?

   • Adjustments occur due to dividends, stock splits, return of capital, and other corporate actions, ensuring the cost basis reflects true ownership value and taxable profit.

Further Considerations

Practical Tips

• Keep Detailed Records: Regularly save transaction confirmations and keep an eye on any Fidelity updates or corporate actions affecting stocks.

• Tax Reporting: Accurate cost basis ensures compliance with tax laws, prevents overpayment of taxes, and could potentially lower taxable capital gains.

• Consult a Professional: Regularly consult with tax advisors to ensure understanding and effectiveness of cost management in your investments.

Recommended External Resources

• IRS Publications on Cost Basis: Refer to the IRS Guide on cost basis for comprehensive tax directives.

• Fidelity Learning Center: Explore Fidelity’s online resources or in-person workshops for detailed educational aids.

Properly managing your cost basis is a vital component of investing that helps you make informed decisions. Once comfortable with these processes on Fidelity, you’ll achieve greater confidence in managing your investments, optimizing tax liabilities, and assessing financial performance. Always remember, the more informed you are, the better positioned you are to make impactful investment decisions.