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Cost Basis

Investors need cost basis information to properly report gains or losses when filing tax returns and to determine unrealized gains or losses. Interactive Data automates and streamlines the research of cost basis information and delivers adjusted cost basis calculations.

With the passage of the Emergency Economic Stabilization Act of 2008, broker dealers will be required to report adjusted cost basis beginning in 2011 and Interactive Data can provide the information to help meet this new requirement.

Interactive Data delivers high quality information on the tax and cost basis impact of corporate actions, easing the burden of determining capital gains on investments. Spin-offs, mergers, distributions, stock splits, and numerous other corporate actions can have a significant impact on the cost basis of a security. Investors, tax advisors, and brokerage firms have historically had a difficult time collecting cost basis information due to the difficulty of tracking ownership and the impact of corporate actions over time.

Interactive Data analyzes corporate actions that can impact a security’s cost basis, and electronically publishes this information to help securities and tax professionals update, maintain, and derive records to reflect these events. Electronic publishing options allow users to access the information in a variety of ways; ensuring that the information is available, when and how a client needs it.

Interactive Data provides various features and applications that fit the needs of a wide variety of financial companies who need to calculate cost basis. Users have the ability to search and retrieve information from Interactive Data’s cost basis database that references corporate actions that can date back to the inception of the security.

The Interactive Data cost basis calculator provides the ability to automate the calculation of adjusted cost basis taking into account corporate actions during the period specified by the client. Subscribers simply enter the security identifier, the buy and sell dates, the quantity, and the purchase price. The cost basis calculator will return a bottom-line cost basis per share and aggregate cost figure, taking into account cost basis-affecting events during the period. Calculator results also show the cost basis of securities that may have emanated from the original position as the result of mergers, spin-offs and distributions. Equipped with historical daily prices and dividends, the calculator will allow for multiple tax lots and can account for dividend reinvestments.

Interactive Data’s Cost Basis service offers end-of-day files for automated transmission of critical data attributes, as well as intra-day alert options that include portfolio tracking of specific cost basis affecting events.

Interactive Data’s Cost Basis service:

  • Provides an issuer’s tax opinion and the issuer's tax status, allocation factors, fair market value and resulting positions
  • Covers U.S. equities, ADRs, fixed income securities and mutual funds
  • Security identification tools (CUSIP directory) and “family tree” to help identify the starting security
  • Features an extensive database, with corporate actions dating back to the inception of most issues
  • Offers historical pricing dating back to the1960s to assist in identifying original cost
  • Includes more than 35 years of dividend history for dividend reinvestment calculations