Cost basis discrepancies

Any idea why my cost basis is different as recorded in Quicken vs. the 1099-B from my broker?

Often, it happens because “dividend” distributions are not always “dividends”. If they are instead “return of capital” distributions, they reduce your basis in the security.

Other times, it happens due to corporate spin-offs. Those will often split the basis across securities.

Home Fool


Thanks. I’m not going to worry about it since the 1099 says the cost basis is higher than Quicken, so it’s in my favor. Besides, I’m sure they are more accurate than my Quicken data.

This seems to be a common problem. You diligently record the price when you purchased the equity. Then when you sell, you find the costbasis on your 1099-B is lower than your recorded price thinking your broker screwed up.

Turns out part of the dividend that was deposited contained some ROC “Return of Capitol” that really isn’t all that evident till you get your 1099. The ROC portion is indirectly taxable as it is subtracted from what you thought was your original purchased cost basis thus making you think you actually purchased the stock cheaper than you thought “Yea”. The bad news is now when you subtract this new lower 1099 cost basis price from the sale price you get a larger number, ie; “Capital Gain”.

Now you have to pay taxes on those cap gains “YUCK”. The good news is that ROC was subtracted from your reported 1099 dividends making it pretty much a wash in that the ROC was removed from Dividends and added to Capital Gains provided you actually used the numbers from the 1099.