In today’s guide, we will explain the various reasons and advantages of using a stock basis calculator for any of your current or future planned investments.
Ensuring you can calculate the variables and numbers with almost no effort and maths skills whether you’re trying to figure out your incoming profits, net gross, turnover, dividend payments or just trying to get a better understanding of where you stand with your stock.
This walkthrough will clarify and explain why a stock basis calculator is a crucial tool for anyone’s investment adventure, from day trading to long-term investments.
What Is A Stock Basis Calculator?
Good question and I’m glad you asked. A stock basis calculator helps the user determine a stock’s average price, also known as a stock cost basis.
Some calculators vary in usage, but all tend to be somewhat similar in what they do. With this calculator, you can enter the amount of money invested/invested in the stock, the broker fees, and other trading expenses.
This also can be adjusted for corporate actions like mergers, stock splits, and dividend payments.
As you can see, using a stock basis calculator brings many advantages and simplicity to the sometimes overwhelming and confusing procedure of calculating it all the traditional way.
What Happens If I Don’t Know My Cost Basis?
It’s advised that you search all your personal information and records and try to find the brokerage statements that will contain your actual cost basis.
If this fails, you can also try the brokerage firm’s website or contact them to see if they can provide you with the necessary information you require.
How Can I Calculate My Cost Basis If I Cannot Get The Needed Information From My Broker Or Statement?
You can calculate your cost basis per share with these two methods that are sure to work. Take the original investment amount and divide it by the new number of shares you hold to reveal the new per-share cost basis.
How Do You Calculate The Cost Basis Of Stock With Multiple Purchases?
To calculate the cost of multiple shares purchased, simply add the individual cost basis for each share you own. For example, if you own three shares in the “Stock Basis Calculator app” and buy at ten dollars, one at $15 and one at $20, your total cost is $45.
Do Stock Certificates Contain The Cost Basis?
You’ll need to find the record of the purchase date and price of the stock you hold; its always recommended for you to try these first:
- Sign in to your brokerage account.
- Look at previous broker statements.
- Reach out to your brokerage firm.
- Go online and search for historical stock prices.
- Go directly to the source of the stock.
I Have Sold Some Stock But Don’t Know The Original Purchase Price. How Could I Report The Cost Basis For The Transaction That’s Already Been Completed?
If a publicly-traded company issued the share, look up the historical rate for the shares online and report the share price at the same time as when you executed the purchase of the shares.
If a private company sold the share, contact the company to request the historical price of the stock in question. They should help you with what you need providing you can prove certain credentials.
If options 1 and 2 are not feasible (the share was issued by a company that has since changed ownership or name, or you can not find the historical rate), then report a cost basis of zero for sale.
If options 1 and 2 are not feasible and you are not willing to report a cost basis of zero, then you will pay a long-term capital gains tax of 10% to 20% depending on your tax bracket on the entire sale amount.
Alternatively, you can estimate the initial price of the share. However, it would be best if you were prepared to explain to the IRS when asked how you calculated this price and so forth.
Do I Have A Cost Basis For A Stock I Received For Free?
The basis in the free stock is equal to the income you received when given the stock. You may need to adjust the cost basis as listed.
The cost basis of the stock you received as a gift or “gifted stock” is determined by the sender’s original cost basis and the stock’s fair market value at the time you received the gift.
If the full market value of when you received the gift was more the original cost, use the original cost basis when you sell.
If the full market value of when you received the gift was less than the original basis, and you later sold the stock for:
- More than the original cost.
- More than the fair market value at the time of the gift but less than the original basis cost.
Your selling price becomes the cost basis. You won’t report a gain or loss in this situation, Less than the total market value at the time of the gift.
When you enter the gift stock sale, select the appropriate situation when we ask if you bought the stock.
What Are The Best Free Stock Basis Calculators?
Hundreds of free online stock calculators are available, and there are several options to choose from.
Investment – Click here for the link.
Good Calculators – Click here for the link.
Thomson Reuters – Click here for the link.
Conclusion
And that brings us to the end of our guide on the stock basis calculator. We have walked through the variables and multiple reasons why a stock basis calculator should be used.
Whether it’s used to predict future profits or calculating shares purchased at different times. There is no denying that it is a vital tool to any shareholder, investor, and many more.
Calculating the stock corporation shareholder’s basis is very important because it shows the amount the shareholder can withdraw or receive from the corporation without realizing income or gain.
The shareholder’s basis should reflect the shareholder’s economic investment in the corporation. This should always be remembered.
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