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What should be the cost basis for investments in an IRA

SRC54

OK, as we all know, for Fidelity we have to put in our cost basis and update it monthly. I am doing that. And I use what Fidelity says on its website, but I don't think it is correct. LOL

In reality, there is no cost basis tax-wise for an IRA because every withdrawal is 100% taxable, so the only reason to know the true cost basis is for evaluating adequately how the investment is doing.

If one is reinvesting the dividends in the IRA, which is what one normally does, doesn't the cost of those reinvestments count as part of the cost basis. I mean you are getting a $100 dividend and then "spending" the $100 to buy more stock or mutual fund. OTOH, you don't report the dividend as taxable so I guess the reinvestment cost you nothing.

The only money you "invested" was your annual contribution, but how can you divvy that up between investments? I am going in circles trying to get my head around this.

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Comments

DannyB

@SRC54 Are you sure it worth all the effort to keep up the cost basis in QS?

SRC54

@DannyB It's not hard for me; don't have that much. I am selling some stuff and getting rid of the stuff first that is under performing, but Quicken was telling me everything was doing great. I tweaked it in Classic and now have different amounts from what Fidelity said. I sold some stuff today based on that new information. Is this new information right? Probably not.

I wish I could sell everything frankly. But then where to put it as bank interest will plummet next year most likely.

SRC54

Update: I reinstalled a backup and went back to what I had before in Classic. That is one advantage of Classic over Simplifi. I think it was actually showing my Gain but it was different from the simple difference between Cost and Market Value. Now I can see what classic was doing. And Danny is right that I don't care to have all of that in Simplifi.

I posted it here and in Classic just to gauge what other investors thought, not worried about what's supported and not supported in the two programs so it is not really a software thing, just for my edification. But now that I am 10 years into retirement, I am continuing to simplify.