Re: neg. cost

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Posted by Jim Plummer on April 01, 2006 at 12:36:44:

In Reply to: Re: neg. cost posted by Mark on March 31, 2006 at 18:15:58:

: : Mark,

: : We have been a long time member of a DRIP for Cinergy which is going to be merged with Duke this weekend. In looking at the cost basis today I noticed that I have a negative cost. How can that be. I am still getting new shares with my reinvestments, but thre is cost associated with it so how can the cost cgo below zero?

: : Thanks

:
: Hi Jim,

: What "cost basis" are you looking at? There are different ones, there is the tax cost basis and also the "out of pocket" cost basis. Your historical out of pocket cost can be negative, if you've taken out more money than you've put into the investment over the life of the investment. This is quite possible. Assuming you had a positive purchase price, your tax cost basis should not be negative however.

: Normally, your reinvested distributions are not at a cost of zero, they are at the cost of the cash dividend you used to buy the reinvested shares. The out of pocket cost may be zero, but the tax cost basis for the purchase of these shares isn't normally zero...

: Thanks,
: Mark
: --
: Fund Manager - Portfolio Management Software

Mark,

The cost I am looking is the cost that is displayed on the Cost-Price Trend page. We have never taken anything out of this investment. We just have purchases and reinvestments. I thought the Cost-Price trend displayed your cost basis trend and the current price trend.

Replies:

• Re: neg. cost Mark 13:11:46 04/01/06 (3)
  • Re: neg. cost Jim Plummer 08:03:25 04/04/06 (2)
    • Re: neg. cost Mark 10:12:37 04/04/06 (1)
      • Re: neg. cost Mark 11:38:45 04/04/06 (0)