IRA INVESTMENT "COST BASIS"

Ken267

I have created several investment reports on my quicken program. My reports for my IRA accounts provides a "cost basis" column. It is misleading at best. It includes as a cost all my reinvested dividends and capital gains.

I consider dividends and cap. gains as all GAINS not COSTS since there are no tax obligations for them in IRAs.

NotACPA

A reinvestment creates a new lot of the security … and that lot has a cost basis which adds to the total.

Q is acting correctly, it's your understanding of Cost Basis that's in error.

If reinvestments had no cost, then your performance for the security would be grossly inflated since you'd have a position/lot which had value but no cost.