What is Cost Basis?

UPDATE COST BASIS FOR TRANSFERRED SECURITIES

The cost basis information associated with transferred positions (e.g., acquisition date and price) will not be automatically provided from the delivering institution for assets sent via Free of Payment of Global Securities. Client will have to update the cost basis in Client Portal if required. Please reach out to the delivering institution in case confirmation of cost basis for the transferred positions is required. If the cost basis is not updated, then positions will be assigned with default cost basis values where the acquisition date is set to the date of transfer and the cost to the closing price of the security on the date of transfer…

The cost basis of a security may change due to a corporate action such as stock split, spin-off, return of capital or a merger resulting in a change in share quantity. The cost basis will also change (increase) in the event of a wash sale. Other actions which can change the cost basis of your position include a dividend reinvestment or other addition to the share position (e.g., purchase or option exercise)…

Assets held for investment purposes, including as stocks, options and bonds, are classified by the IRS as capital assets. When such assets are sold, a capital gain or loss is realized on the sale. If the capital asset is sold for a price greater than its purchase price, then a capital gain has been realized; if less, then a capital loss has been realized. In determining whether a capital gain or loss has been realized, adjustments to the purchase and sales price may be allowed to recognize certain transaction costs such as commissions and other specific adjustments…

The Box 1e of Form 1099-B reports cost or other basis of securities sold. This basis may be adjusted for wash sales, related options positions, and corporate actions. Box 1e is not used for reporting sales of uncovered securities as cost basis is not reported for these sales…