Cost Basis Overview (6:45)

How Advisors Assistant Tracks Basis

Advisors Assistant tracks basis by keeping track of Lots. These lots are automatically maintained by Advisors Assistant based on the Basis Type field in the Investment Information Screen.

Lots can be modified and shares sold can be reallocated for custom tax lots on the Share Allocations Screen.

If you are downloading your investments from DST FAN Mail or another clearing firm, you can assume that the cost basis for your investments is not accurate. This is because most of the download sources do not send historical data. The cost basis is only accurate if the download included the initial buy of the investment. For additional information, please refer to the Initializing Investments Help.

Tax Basis vs Cost Basis

Advisors Assistant uses Lots to track Cost Basis, the COST of shares.  This cost is used to calculate Unrealized Gains.  It is up to the advisor to decide if the "Cost Basis" is also the "Tax Basis."

What Happens When Shares Are Added To An Account

When shares are added to an account through a purchase, dividend, or other type of share addition, Advisors Assistant automatically creates a Tax Lot to track the shares.  This is regardless of whether the account is taxable or non-taxable.

If the account is non-taxable, you will still want to keep track of the basis and the gains from the account.  Applying tax tables to the client's gains is beyond the scope of Advisors Assistant.

Note: Advisors Assistant Tax Lots and Gain Calculations must be checked using actual records from the company issuing the security.  These computations may or may not be correct and must not be relied upon without checking them.  Client Marketing Systems, Inc. makes no warranty, expressed or implied, as to the accuracy of tax lot or other computations.

Transfers Of Shares From Other Sources

When shares are transfers, especially form other sources so that they appear as transactions downloaded, there is usually no price data in the download.  These present special challenges for tracking basis.  Click HERE for more information about transfers.

Ways To Affect Basis

There are several ways you can affect what happens to basis when various transactions are created.

Basis Type

From the Modify Investment Screen, you can set the basis type (FIFO, Average, LIFO, etc.) to control the way tax lots are calculated.

This does not affect the basis in, but affects what happens when a sale takes place.

Basis Per Share

From the Modify Investment Activity (transactions) you can enter a basis per share and freeze the basis.  This will fix that basis and the system will not recalculate that transaction.

Initialize The Basis

You can't download investment history.  Advisors Assistant has a screen that you can use to initialize values rather than enter a long history.  This is on the Initial Values Tab on the Modify Investment Screen.

Basis In

The basis in is tracked using tax lots.  When shares are added or reconciled into an asset, the basis in is increased.  You can see the basis in from the View Investment With Cost Basis Screen.

Basis Out

When shares are sold, the basis is subtracted from the various tax lots based on the method you have designated in the Modify Investment Screen.  For example, if you chose FIFO, the basis will be subtracted from the oldest tax lot.

Shares Held

From the View Investment With Cost Basis Screen, the Shares Held parameter shows you basis per share and the cost of each tax lot.  You can double click on any of the tax lots to go to the Modify Investment Activity Screen.  From that screen, you can control the basis in using the Basis Per Share Field and Freeze Basis Check Box.

Shares Sold

From the View Investment With Cost Basis Screen, the Shares Sold parameter shows you how much basis was subtracted from each tax lot.

Double clicking on any allocation in the list takes you to the Shares Allocation Screen.  From that screen, you can reallocate how the sell was allocated.  Be sure to read the help on this screen.  The screen is easier than it looks.

See Also

Add/Modify Investment Initial Values (Contains Video)

Transfers To And From Accounts

Splitting Tax Lots

Cost Basis In Investment Terms

Adjusting Cost Basis