The New Cost Basis Tax Legislation for 2011 Leaves Investors To Fend For Themselves

Online, May 15, 2011 (Newswire.com) - The new 2011 Cost Basis legislation which requires brokers to report their clients' cost basis has gone into effect as of January 1, 2011, what most investors don't realize is that the requirement is only for securities purchased after January 1, 2011. That means that brokerage firms are only responsible for what was purchased this year going forward and not for the millions upon millions of shares that investors currently own. This is potentially a huge problem for investors because at the end of the day, they are the one that is responsible for accurately reporting their capital gains/losses to the IRS.

In the last several years, Cost Basis has taken center stage with the IRS, Congress and the Financial Services industry. The focus began back in 2005 when the IRS reported over $11 Billion dollars in underreported capital gains by taxpayers in their Tax Gap Study. Then in 2008, the Economic Stabilization Act was passed by Congress which included the Cost Basis Legislation and since then, the financial industry has been busy making sure that they will be compliant going forward from 2011 for stocks and 2012 for mutual funds.

So what does that mean for an investor with a broker and an investor without a broker? Practically the same thing, unless your brokerage firm is going to provide you with your cost basis for the stocks you already own as a customer service. If not, then it means that you will have to calculate and be legally responsible for your cost basis information as much as the guy who trades online in his underwear at 2:00 a.m.! As many investors already know, trying to get the purchase or sale price, all of your reinvested dividends, corporate actions and other critical pieces of information necessary to calculate your adjusted cost basis are time consuming, frustrating and susceptible to human error.

Recently there have been articles and blogs telling investors where they can go to research pricing and corporate action information in order to calculate their cost basis, but Cost Basis adjustment was always a very difficult calculation, even for professionals, so how is an investor supposed to research and calculate this information accurately enough to report to the Internal Revenue Service? What wasn't widely known until now is that there is an amazing online tool that is available to the public. It is called NetBasis and is available at www.netbasis.com.

NetBasis will take into consideration all corporate actions as well as any possible dividend returns or return of capital that may have occurred during the exact holding period of the investment, so the information is specifically tailored to the individual investor You simply choose your security, enter in your purchase and sales date(s), and number of shares and NetBasis does the rest in seconds. It also gives you the ability to choose your accounting method which investors are now able to do under the Cost Basis legislation. NetBasis can also calculate the cost basis for securities that were gifted or inherited.

NetBasis is a system that was originally designed for the financial services industry. A professional version of NetBasis is currently being used by brokerage firms, accounting firms, Fortune 500 companies, and universities, but now everyday American investors can access the same tool and get the same accurate results. For a small fee of $19.50, an investor can enter multiple buys and sells for one security and receive their adjusted cost basis, gain/loss, sale proceeds, fair market value and a detailed accounting page that provides you with a chronological listing of all of the corporate actions and other adjustments that have occurred to your security.