Cost basis information
Answers to common questions
The Internal Revenue Service (IRS) requires mutual fund companies to provide cost basis information to both shareholders and the IRS when certain mutual fund shares acquired on or after January 1, 2012, are exchanged or sold .
Shareholders should carefully review the cost basis information provided by Franklin Templeton and Putnam Investments, and make any additional basis and holding period adjustments that are required when reporting these amounts on their federal and state income tax returns. Shareholders remain responsible for complying with all federal and state income tax laws when filing their income tax returns and should check with their tax professional if they have any questions..
Below are answers to some common questions about cost basis reporting.
What is cost basis?
Does cost basis reporting apply to all mutual fund accounts?
What cost basis methods are available at Franklin Templeton and Putnam Investments for covered shares?
What is Franklin Templeton's and Putnam Investments' default method?
What are "covered" and "noncovered" shares?
What happens if a cost basis method is not chosen?
Can the cost basis method be changed?
How can the method be changed for Franklin Templeton accounts?
How can the method be changed for Putnam Investments accounts?
For accounts with specific share identification (SSI) as the method, how can the standing lot relief order (SLRO) be changed?
How will cost basis information for covered shares be reported?
Besides 1099-B reporting, where else will cost basis information be provided?
Which method will Franklin Templeton and Putnam Investments use for calculating the cost basis of noncovered shares?
What if cost basis is not available for noncovered shares?
What cost basis information will be reported on Form 1099-B?
What is Fair Market Value (FMV)?
For additional information on cost basis, shareholders should contact their tax professional or visit the IRS website.
Important Information
The information contained in this tax center is not intended to be a complete discussion of all federal or state income tax requirements. This information cannot be used by an investor to avoid any income tax penalties that may be imposed under the Internal Revenue Code. Investors should seek advice from a financial and/or tax professional about the potential tax implications of their investments in Franklin Templeton and Putnam Investments fund(s) based on their individual circumstances.