Home Account PricesPerformance Funds Retirement College Education

New window: AdvantageVoice - Opening the door to investment conversations. Read our new blog.

Cost Basis Statement

Information for the 2011 Tax Year

This statement is designed to simplify the process of calculating and reporting gains and losses. To calculate your gains and losses, you need to determine which shares you sold and how much you paid for them. This is known as the "basis," or more commonly, "cost basis," of your shares. The proceeds from the sale, minus the basis of the shares, is your capital gain or loss.

Who will receive this form?

A cost basis statement may be provided to shareholders who:
  • Redeemed shares in 2011, AND
  • Received a Form 1099-B for a Wells Fargo Funds.

A Wells Fargo Funds® Cost Basis Statement calculates the gain or loss using the Average Cost method of accounting. This is one of multiple methods available for calculating the cost basis of your shares. A shareholder is not required to use this statement or the Average Cost method of calculating cost basis. For tax year 2011, this
information is NOT reported by Wells Fargo Funds to the IRS.

I've redeemed shares from my Wells Fargo Funds account. What do I need to know about calculating my cost basis?

  • You must state on your tax return the cost basis method you have selected. No matter which cost basis method you choose, you may not change to another method without permission from the IRS for the sale of noncovered shares.
  • Reinvested dividends or capital gains distributions add to the cost basis of your shares. These dividends purchase additional shares. Your confirmation statements show you the number of shares purchased and the price of those shares.
  • Return of capital distributions reduces the cost basis of your shares. If the Fund distributes a return of capital, it will report this amount to you in box 3 of Form 1099-DIV at the end of the year.
  • The average cost methods are available only for mutual funds. They are not acceptable for sales of other investments, such as individual stocks and bonds. Different methods may be used for different funds.
  • Transfers of shares due to gifts or inheritance may require different basis calculations. In these situations, please consult your tax advisor before using this cost basis statement.
  • Under current federal tax rules, shares you hold for more than one year receive long-term capital gains treatment, while those held for one year or less receive short-term capital gains treatment. In addition, the IRS allows you to write in "various" for "date acquired" if using our cost basis statement.
  • There may be additional circumstances preventing a specific account from receiving this information. You may contact a representative if you are uncertain if this applies to your account.

What do I need to know about a wash sale?

If you sell shares at a loss and purchase shares in the same fund within 30 days before or after the sale, the IRS considers the purchase to have "washed" all or a portion of your loss. The IRS designed this rule to discourage investors from selling securities solely for the purpose of generating a tax loss. A wash sale is indicated on your statement.

In the case of a wash sale, two important adjustments must be made. All or a portion of the loss must be deferred and added back to the basis, and the holding period of the purchased shares must be changed to account for the deferral. Because of the popular use of automatic investment plans, systematic withdrawal plans, and dividend reinvestment programs, wash sales are common in mutual funds. This statement already reflects the allowable loss.

Any tax or legal information in this website is merely a summary of our understanding and interpretations of some 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 particular situation. Wells Fargo Funds Management, LLC, Wells Fargo Funds Distributor, LLC, nor any of their representatives may give legal or tax advice.

  • Not FDIC Insured
  • No Bank Guarantee
  • May Lose Value

Secure Account Access Login