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Bizare accounting for Vanguard Dividends - ST/LT Capital Gains

William SF
William SF Member
edited February 2022 in Investing (Mac)
On 12/29/21 Vanguard posted ST and LT Capital Gains / as reinvestments to my IRA. Something odd about the accounting.

- Total # of shares increased, as expected.

-But the cost basis for this fund unexplianable increased (exactly the amount of the reinvestment. So, looks like the "Dividend S-T/L-T Capital Gains" function fails to account for the full transaction.
- Now the accounting is incorrect, the gains/loss per investment way off - and I worry that this may have been happening at the end of every quarter.


  • Frankx
    Frankx SuperUser ✭✭✭✭✭
    edited January 2022
    Hi @William SF

    Bizaare??? really??? 

    You do understand, that what happened is that you received was a capital gain distribution from a mutual fund - right? 

    What is a capital gain distribution? It is a "distribution" (or payout) from the mutual fund which often happens at the end of the year.  And - in your case (as in many others) - resulted in your using the distribution to BUY more shares of the mutual fund.  When you buy more shares, then your basis in the investment increases.  And yes, it likely has happened before if you have agreed to have these distributions reinvested in the past.  Not at all "unexplanable".


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  • jacobs
    jacobs SuperUser, Mac Beta Beta
    @William SF Frankx has it exactly right: your cost basis should be going up when you reinvest dividends or capital gains, because you are purchasing more shares with the proceeds you earned. 
    Quicken Mac Subscription • Quicken user since 1993
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