Obtaining average Cost Basis

[toteman]

I have been trying to figure out just how to obtain the average cost basis per share, for any one particular stock within my portfolio, including all brokerage fees added into the Cost Basis equation. My time is unfortunately limited, so I don't have a lot of time to learn the software too thoroughly right now, was just hoping someone might be able to help me in the right direction, and hopefully save me some time, would be much appreciated. Thankyou, and Merry Christmas - Trevor

[Mark]

Hello Trevor,

Create a custom report, and add any of these fields to it:

Tax basis per share, AVG (ending)
Tax basis per share, FIFO (ending)
Tax basis per share, Specific Lot

[toteman]

Hello Mark,
I tried the solution you proposed, but it did not seem to concurr with my manual addition and division including all brokerage fees and previous purchases and sales on any specific given security to calculate the per share cost basis. For some reason that I don't understand there is a difference in the figures attained, and i am certain the figure I came to by manual calculation is the correct figure I was seeking. so not sure where the variation comes about with fund manager, Would appreciate if you had any further input assistance in this matter - See below the results as I found them after using your suggested method as opposed to my own manual calculations, --


Custom
Etrade - Symbol: ANON, 27/10/1999 - 21/12/2007

Tax basis Tax basis Tax basis
Investment Name /s AVG (end) /s FIFO (end) /s ID
Anonymous Stock Inc Com 0.00936 0.00833 N.A.

Etrade:
**************************************************************

Investment Transactions
Anonymous Stock Inc Com: 27/10/1999 - 21/12/2007

Date Transaction Price Shares Fee Amount ($) Memo Shr Blnc Balance ($)
21/11/07 Sell 0.01940 -30,000 10.00 -572.00 SELL TRADE 10,000 194.00
21/11/07 Buy 0.01400 40,000 9.99 569.99 BUY TRADE 10,000 194.00
23/11/07 Buy 0.02050 10,000 9.99 214.99 BUY TRADE 40,000 820.00
23/11/07 Buy 0.02320 20,000 9.99 473.99 BUY TRADE 40,000 820.00
26/11/07 Sell 0.02400 -10,000 10.00 -230.00 SELL TRADE 30,000 720.00
27/11/07 Buy 0.01900 10,000 9.99 199.99 BUY TRADE 40,000 760.00
30/11/07 Buy 0.01240 40,000 9.99 505.99 BUY TRADE 80,000 992.00
11/12/07 Buy 0.00670 20,000 9.99 143.99 BUY TRADE 100,000 670.00
18/12/07 Buy 0.00560 25,000 9.99 149.99 BUY TRADE 100,000 560.00
18/12/07 Sell 0.00570 -25,000 10.00 -132.50 SELL TRADE 100,000 560.00
21/12/07 Buy 0.00430 65,000 9.99 289.49 BUY TRADE 175,000 752.50
21/12/07 Buy 0.00400 10,000 9.99 49.99 BUY TRADE 175,000 752.50

************************************************************************************************
Current Shr Blnc Amount Total
175,000 $1663.91

So adding all the completed transactions in this ANON security including brokerage fees the total
divided by the outstanding Current Share balance is shown below --
$1663.91 ÷ 175,000 = .009508

This per share cost basis using the above formulae of All transactions including brokerage fees
divided by Current Share Balance = .009508 and is contrary to the Fund manager tax basis average figure of .00936 that
is obtained from doing any of the following Custom reports -
Tax basis per share, AVG (ending) - .00936
Tax basis per share, FIFO (ending) - 0.00833


Can you please explain a way that I can reach the same figure as manually worked out from dividing the current Share balance
into the Total of all transaction amounts as shown above, as this is all I really require to do, to determine my actual per share cost basis, and it appears for some reason that the tax basis per share (ending) doesn't fullfill this requirement, I am not sure as to why. But if there were a way to simply do the required calculations I have shown above within Fund Manager, this would be a great releif, and save on all the manual adding and division of figures. Even if there was a way within Fund Manager to Calculate and view the overall Total Amount of all transactions including brokerage fees added together for any given specific security, this would make life a lot easier, as all I need then do is divide the outstanding current share balance into that total amount figure to obtain the Per Share Cost basis as personally required. Please advise how if possible anything I can do to obtain these desired results within Fund Manager. Thankyou and much appreciated, and I must also commend you on such a great software program as what you have developed here. I have used it already to great effect to calculate and work out all capital gains/loss in my own currency, foreign to the one traded in. Can't recomend it any higher, its just superb, and wish I had of heard of it earlier.

Cheers
Trevor

[Mark]

Hi Trevor,

It kind of looks to me like you have some duplicated 'buy' transactions. Was that transaction report showing all the transactions, or did you have some others not shown? The ones shown don't add up to the 175,000 share balance you stated. For example, you had 2 buys of 175,000 on 21/12/07, and only sold 140,000 total after that, plus you had some other buys. I would suggest checking that all your recorded transactions are correct, and aren't duplicated/missing.

Those fields will calculate what you're describing, your cost basis per share of all your remaining shares on the ending report date. Of course, your data must be entered accurately.

[toteman]

Hi Mark
Thanks for persevering with me concerning this dilemma, its much appreciated. The share transactions I showed you in the previous reply were actually all imported directly from my brokerage account, directly into fund manager, they are all the trades that I had done in this one particular stock to date, of which all transactions were shown in their entirety. There were no double ups on transactions or any discrepancies in the input figures, and just to be sure I even went right through them once again and re-entered them all manually, and while that has had the effect of changing the Tax basis per share, FIFO (ending) to - 0.00827 , it did not change the Tax basis per share, AVG (ending) - 0.00936 to anything different than the first report read out showed. The figures from these fund manager custom reports based on the transactions for this particular security still contradict the true per share cost basis which I calculate manually from all transaction buy and sell totals including brokerage fees added together $1663.91 then divided by the closing outstanding share balance of 175,000 shares, to come to the following per share cost basis of - .009508 - I have re listed all transactions and the custom readout concerning this stock here again, and hopefully we can get a better picture of what is exactly happening. Please open the following web link to see the custom reports obtained by Fund Manager, it was easier to show the reports in a separate image where a better easier to understand layout was possible --

http://members.optusnet.com.au/trescat/pictures/FM_C_Report.gif


Taking the total of all transaction amounts $1663.91 and divide by the outstanding share balance 175,000 and I get the per share cost basis of .009508
No matter what I do, even re-entering all the transactions into fund manager’s portfolio manually, it still comes up with the same contradictory figures using the following custom report settings --
Tax basis per share, AVG (ending) - 0.00936
Tax basis per share, FIFO (ending) - 0.00827

Nothing from those custom settings you referred me to, matches what the true overall per share cost basis really calculates at - .009508 when all the figures in the amount column above are totalled and then divided by the remaining currently held share balance of 175,000 shares, it just doesn’t match what fund manager readouts show me. Once again any further input and hopefully enlightening on what is not adding up here, is greatly appreciated. Thankyou - Trevor

[Mark]

Hi Trevor,

Thanks for the explanation, I believe I see the discrepancy. You are taking the total transaction amount of $1663.91 and dividing it by the number of shares you own currently. This is not the "current" cost basis of the shares you still own. This is what FM refers to as the "historical" or "inception" cost basis. The "current" cost basis is different, it is how much you spent acquiring the shares you still own. The amount you sold prior shares for is not meaningful or used in the calculation of current share cost basis.

For example, let's say you bought 100 shares for $1,000 (which is $10/share), and then sold 50 of those shares for $750. Your remaining 50 shares have a 'current' cost basis of $500 (or $10/share). Your historical cost basis is $250 (or $5/share). The difference is whether you're calculating the cost basis over the full life of the investment, or just looking at the cost basis of those particular remaining shares, ignoring how you've done in the past.

These fields:
Tax basis per share, AVG (ending)
Tax basis per share, FIFO (ending)
are reporting your 'current' tax cost basis on the shares owned on the ending report date.

You can create a custom report, and compare these fields:

OOP basis per share (current)
OOP basis per share (inception)

Also, you can graph the OOP cost basis in either current or historical mode. For example, if you graph the "Cost - Price" graph you can control whether the 'price' line is calculated as a current cost or a historical cost using "Graphs / Options / Historical Cost".

[toteman]

Thanks Mark, for your explaining things to me and your patience and time spent doing so. I think we may have now got it nailed, fingers crossed, I shall give what you say in your latest response a go, and I guess it should all work out just as I had hoped for. You must be commended in your customer service here on these message boards, it seems its likely almost a full time job for you. Never the less its all greatly appreciated, hats off to you Mark, and may you have a great New Year, and hopefully find the time for other things apart from answering the never ending questions.
Cheers-Trevor

[toteman]

Tried it Mark, its perfect - works a treat, and will save me all the unnecessary manual adding and division. Cheers- Trev