Your mutual fund account's cost basis is the amount you paid to purchase shares of the fund, including reinvested dividends. Tracking your cost basis is important because when you sell shares it is used to determine the capital gain or loss of that sale, and eventually the amount you may owe in taxes.
Methods for calculating cost basis
There are several IRS-approved methods for calculating the cost basis of your shares. See IRS Publication 550, Investment Income and Expenses, which can be found at www.irs.gov, for additional information.
How Janus calculates your cost basis
Janus calculates cost basis for shareholders using the average cost single-category method. To determine whether you are eligible to use the information provided by Janus and whether this method is best for your tax situation, please consult your tax adviser.
First, Janus adds up the total adjusted basis of all the shares you owned in the fund at the time of the sale or exchange, regardless of how long the shares were owned. This total is divided by the total number of shares owned at the time of the sale or exchange to find the average cost basis per share. Then, Janus multiplies the average basis per share by the number of shares being sold to find their average cost basis. When average cost basis is subtracted from the proceeds on the sale or exchange, the result is the gain or loss.
Janus will also let you know whether your gain or loss is short-term or long-term. The shares sold or exchanged are considered to have been the first shares purchased.
|Date of Purchase
||No. of Shares
|May 1, 2009
|August 6, 2009
|December 10, 2009
- Average cost basis per share prior to redeeming: $1,750.00/150=$11.67 per share
- Redeemed $1,650 on June 4, 2010 selling 110 shares at $15 NAV.
- Basis of the redeemed shares = 110 shares (total number of shares redeemed) multiplied by $11.67 (average cost basis per share) totals $1,283.70.
- Sell the 100 shares purchased on May 1, 2009 (shares held greater than 12 months) = $1,500 proceeds (100 shares x $15) minus $1,167.00 basis (100 shares x $11.67). This results in a long-term gain of $333.00.
- Sell 10 shares purchased on August 6, 2009 (shares held for less than 12 months) = $150 proceeds (10 shares x $15) minus $116.70 basis (10 shares x $11.67). This results in a short-term gain of $33.30.
View your cost basis. If you sold shares of your Janus funds during the year, your account information will include any remaining cost basis adjusted for the sales of shares as calculated based on the explanation above.
Don't forget your reinvestments
For purposes of cost basis calculations, reinvested dividends and capital gains distributions are the same as any other share purchase.
Please consider the charges, risks, expenses and investment objectives carefully before investing. Please see a prospectus , or if available, a summary prospectus containing this and other information. Read it carefully before you invest or send money.
Any tax or legal information provided is a summary of our current understanding and interpretation of the current income tax regulations and is not exhaustive. Investors should consult their tax advisor or legal counsel for advice and information concerning their specific situation.
Additional activity, such as purchases, dividend reinvestments and redemptions, may change your average cost basis. When applicable, the average cost will be updated on the following date to reflect such transactions.
Janus Distributors LLC