Save on Taxes: Know Your Cost Basis

Next Steps

    • Find out which cost basis method is your current default. If you’ve never checked, chances are you’re defaulted into FIFO for stocks and “average cost, single category” for mutual funds. Talk with your Schwab Financial Consultant or call 800-355-2162  to confirm or adjust your current method.
    • As a Schwab client, you can use a cost basis calculator called the Tax Lot Optimizer™ to help determine the best method for selling an investment and potentially minimizing the tax impact of that transaction. 
    • Schwab clients can also take advantage of our Cost Basis Calculator to determine costs for all the securities in your portfolio. After you log in, click “Positions” under the Accounts tab, navigate to the Unrealized Gain/Loss tab, and click “Cost Basis Calculator.”
    • And remember, before you enter into any significant transactions, it’s always a good idea to consult with a tax professional to determine the best method for your particular situation.

Important Disclosures

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment or tax advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision. 

All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed. 

Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve.

This information is not intended to be a substitute for specific individualized tax, legal or investment planning advice. Where specific advice is necessary or appropriate, Schwab recommends consultation with a qualified tax advisor, CPA, financial planner or investment manager.

The Schwab Center for Financial Research is a division of Charles Schwab & Co., Inc.