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