To properly report your capital gains and losses on Form 8949 and Schedule D, you will need to determine your basis (cost) of your shares sold to enter in Purchase price or other basis
. Your basis should be maintained in your records. Your plan administrator or brokerage firm may be able to provide you with the history of your account in order to determine the purchase prices(s). At this time, TaxACT® does not provide a portfolio tracking tool for your investment purchases and sales.
If you sell stock acquired at different times* and you sell some, but not all, of your shares, your basis is the basis of the shares you acquired first (i.e. first-in, first-out). Note: IRS regulations do not permit the use of average cost basis, except for shares of mutual funds.
For more information on computing basis in stocks and other investments, see IRS Publication 550 Investment Income and Expenses
, Chapter 4 Basis of Investment Property
, and IRS Publication 551 Basis of Assets
*TaxACT supports an entry of "Various" as the date acquired on Form 1099-B. Enter the data on Form 1099-B in the Investment Income section of TaxACT. Enter "Various" for date acquired, then enter the basis, date sold, and sales proceeds. The holding period will be determined based upon the reporting category you select (A-C for short-term; D-F for long-term), if one has already been selected. However, if a reporting category has not already been selected, the program will default to reporting category A, indicating a short-term transaction
Note that any link in the information above is updated each year automatically and will take you to the most recent IRS version of the document at the time it is accessed.