Mutual fund tax help!?

[investingnoob]

So I'm on Turbotax trying to do my taxes.
I'm stuck on my investments.
I sold my Vanguard Total Bond Market Index Fund last year. It was not a retirement fund, just a mutual fund trying to earn a bit of interest.

I opened it in 09/2009.

I only bought $4,000 worth of shares.

It earned dividends also.

I got a form 1099-B for it and shows I sold 393 shares for $4114.00
But it is asking for my "cost basis" and it doesn't show on my form nor on the site.

This is dumb, do I actually need to put this on my taxes? It lowered my refund by $600 and that doesn't seem right just for selling my mutual fund?

Help please.

[bennkar]

Go to the Investopedia site and search for cost basis. (I would put a link here, but the site won't let me )

[disneysteve]

When you log in to your Vanguard account, there is a link to click for your cost basis. However, I'm not sure if you can access that if you've already sold the shares. I would give Vanguard a call. They should have no trouble giving you that figure. If you want to do the math yourself, just pull all of your statements and you'll have all the info you need. Much easier to call them if you can't get the info online.

[SnoopyCool]

I'm sorry I don't have specific help for how to get your basis, but I know that you can find trendlines for your investment and look to the date when you bought it to get the cost. You have to have that to get the net of what you earned when you sold for your taxes. And it should be included on your taxes because Vanguard sent that information to the IRS, so if you exclude it you might be audited.

[jpg7n16]

I only bought $4,000 worth of shares.

Then your basis is $4000 plus any comissions paid to purchase.

This is dumb, do I actually need to put this on my taxes? It lowered my refund by $600 and that doesn't seem right just for selling my mutual fund?

Help please.

Yes you do, but once you deduct your cost basis out, the impact will be much less.

You likely invested $4000, maybe $14 commissions. (easy math)

Proceeds - cost = taxable gain

$4114 - $4014 = $100

You'd then be taxed on $100. And there's no way that'd impact your taxes by $600. Maybe by $20

[MonkeyMama]

Cost basis would also include any reinvested dividends or interest.

(Putting in a cost basis of $4k would significantly improve your taxes - but your basis is probably higher).

I would just call VG and ask what your cost basis is. Discount brokerages don't generally spend a lot of time and effort tracking basis, but in your case is simple and if you ask they would tell you.

[MonkeyMama]

And it should be included on your taxes because Vanguard sent that information to the IRS, so if you exclude it you might be audited.

You wouldn't get audited, but you would get a notice from the IRS that you neglected to report $4k of income, and would owe taxes, interest and penalties on the $4k.

[investingnoob]

ok I found my cost basis of $4000.
Thanks guys!

[disneysteve]

ok I found my cost basis of $4000.
Thanks guys!

If your initial investment was 4K and you reinvested dividends, your basis is not 4K.

[jpg7n16]

If your initial investment was 4K and you reinvested dividends, your basis is not 4K.

Though, the $4k would still be the basis if those dividends were paid to the cash account and not reinvested.

So if you called them and they said $4k, they weren't lying

[disneysteve]

Though, the $4k would still be the basis if those dividends were paid to the cash account and not reinvested.

Correct.

[disneysteve]

I got a form 1099-B for it and shows I sold 393 shares for $4114.00
It lowered my refund by $600 and that doesn't seem right just for selling my mutual fund?

By the way, once you report the tax basis of $4,000, your refund won't be reduced by so much. Reducing it by $600 assumed you owed taxes on the entire $4,114. In reality, you only owe taxes on $114 so that should only knock about $17 off of your refund.