A trade without a cost basis is like a trader without their platform–lost. What is cost basis and why is it so important? It is important to understand what your cost basis is per trade because that’s what dictates whether a trade was for a gain or loss. More importantly, it’s what gets reported to the IRS. Understanding your cost basis and what can affect it is important during tax time.

At first glance, cost basis can seem scary and intimidating, but no need to fret. We broke down various aspects of cost basis that you should keep on your radar.

How is my cost basis reported?
Any security purchased at tastyworks will be listed on your Form 1099-B. Your Form 1099-B may also contain any adjusted cost basis.

What about securities transferred via ACAT?
Any stock or options position that transferred to your tastyworks account via ACAT (Automated Customer Account Transfer) has been reported to our clearing firm, Apex Clearing Corporation. The trade price listed for any transferred security on the tastyworks platform is not your cost basis since the trade price marked is on the day the transfer came in.

What can affect my cost basis?
  • The short answer: a lot of things. The following list includes but is not limited to:
  • Dividend Reinvestment
  • Adding to a position (stock or options)
  • Splits
  • Spinoffs
  • Mergers
Any adjustments to your cost basis may also appear in your 1099-B.