Please provide the current stock value, the number of shares in each purchase, and their corresponding value to calculate cost basis. (You can enter up to 25 values only)
Use this calculator to determine the cost basis of stocks, stock profit, and percentage, and the total shares you purchase. Cost basis refers to the average down multiple stock purchase costs. It helps to figure out capital gain or loss when you sell the investment.
This is helpful while calculating profit or loss by subtracting the original cost from the selling price. This information is essential for tax purposes, as capital gains are often subject to taxation.
Cost basis is the average price of stock purchase if you buy multiple shares of the same company. It is the purchasing cost that is adjusted for dividends, stock splits, and return of capital distributions.
A cost basis is necessary to estimate the capital gain that defines the difference between current market value and cost basis.
If an investment does not include any additional adjustments or costs, then your cost basis is the actual purchase price.
If you bought 100 shares of a stock at the rate of $100/share, then your average cost base is $100,000, such that:
Cost Basis = No.of Shares * Share Price
Cost Basis = 100 * $100
Cost Basis = $100,000
This method tells you the average price bought per stock if you purchase multiple shares bearing different purchase costs.
$$ \text{Cost Basis} = \dfrac{\left(c_{1}*s_{1}\right) + \left(c_{2}*s_{2}\right) + \left(c_{3}*s_{3}\right) + … + \left(c_{n}*s_{n}\right)}{s_{1} + s_{2} + … + s_{n}} $$
Where;
Suppose a company has purchased a stock 3 times against different prices, such that:
What is the average cost base of the stock?
Step # 01: Write the Given Values
From the problem, we have the following data:
Step # 02: Write Down the Formula
$$ \text{Cost Basis} = \dfrac{\left(c_{1}*s_{1}\right) + \left(c_{2}*s_{2}\right) + \left(c_{3}*s_{3}\right) + … + \left(c_{n}*s_{n}\right)}{s_{1} + s_{2} + … + s_{n}} $$
Step # 03: Substitute the Values In the Cost Basis Formula
Enter the values into the formula:
Cost Basis = [(40 * 100) + (65 * 200) + (30 * 150)] / (100 + 200 + 150)
= (4000 + 13,000 + 4,500) / 450
= 21,500/ 450
= 47.77
The following are the few practical areas where our calculator serves various purposes:
With the help of the stock cost base calculator, you can determine this financial parameter, and compare it with the current market value. By doing this, he/she can estimate the profit or loss on a stock investment.
With the cost basis known, you can analyze your investment performance accurately.
Using our cost basis calculator helps to sell a stock to offset capital gains from other investments. This leads to a reduction of tax liabilities.
Renters can use the above tool to determine the annual depreciation expense based on the cost basis.
Real estate agents can use this calculator to calculate any capital gains or losses when selling a property.
Businesses can use the cost basis estimator to estimate the potential of their inventories, which ultimately affects their tax filings and financial statements.
