“Cost basis” is the industry term for the purchase date and price you paid for your investments. The IRS website says “the basis of stocks or bonds you buy is generally the purchase price plus any costs of purchase, such as commissions and recording or transfer fees.” Fees that you paid to invest, dividend reinvestments, and corporate actions can also impact your cost basis.
Wealthfront uses your cost basis to manage your tax liability when converting your transferred investments to your Wealthfront portfolio. Specifically, we look at your purchase date and purchase price to ensure that we only sell investments you’ve held for more than a year (longterm gain), or when the investment is worth less than when you bought it (which is an opportunity to harvest a loss).
Learn more about how we manage your tax liability during account transfers here.
This communication has been prepared solely for informational purposes only. Nothing in this communication should be construed as an offer, recommendation, or solicitation to buy or sell any security or a financial product. Any links provided to other server sites are offered as a matter of convenience and are not intended to imply that Wealthfront or its affiliates endorses, sponsors, promotes and/or is affiliated with the owners of or participants in those sites, or endorses any information contained on those sites, unless expressly stated otherwise.
Wealthfront offers a free software-based financial advice engine that delivers automated financial planning tools to help users achieve better outcomes. Investment management and advisory services are provided by Wealthfront Advisers LLC, an SEC registered investment adviser, and brokerage related products are provided by Wealthfront Brokerage LLC, a member of FINRA/SIPC.
Wealthfront, Wealthfront Advisers and Wealthfront Brokerage are wholly owned subsidiaries of Wealthfront Corporation.
© 2020 Wealthfront Corporation. All rights reserved.