Why Vanguard doesn’t provide cost basis for IRA accounts?

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  • #92445 Reply

      Why does Vanguard refuse to update cost basis for IRA accounts and claim that cost basis is “not an accurate indicator of performance” while other brokerages like T Rowe Price willingly provide each of my mutual fund’s performance in my Roth IRA?

      #92446 Reply

        Did you contribute directly to the account or roll it over? I have a trad and a Roth IRA there and I am able to see cost basis, realized/unrealized short and long term gains on my IRA accounts at Vanguard.

        #92447 Reply

          I think it’s one way Vanguard keeps its fees low.

          Basis in an IRA doesn’t matter, because you’re taxed on the full amount withdrawn from a Traditional IRA and not taxed on Roth IRA withdrawals (if you follow the withdrawal rules), so tracking it is unnecessary complexity.

          Don’t miss: We recently broke up with our financial advisor and transferred our money to Vanguard – We need to choose funds

          #92448 Reply

            That’s ridiculous. Just transfer it over to Fidelity. They don’t give those excuses.

            #92449 Reply

              Vanguard is pretty lazy with cost basis in my experience – stuff I’ve transferred there has almost always lost basis information, which is frustrating at tax time. That said, they do show a percentage on the portfolio overview at least on the mobile app (I hate their mobile app and generally use Fidelity these days anyway, for what it’s worth).

              But besides all that, cost basis isn’t really a good way to reflect performance. Here’s a couple examples:

              You buy $1,000 of vtsax. It goes down to $950, but pays a $100 dividend, reinvested. Cost basis will show $1,100 ($1,000 + $100), while the market value is $1,050 ($950 + $100). Cost basis shows a loss of $50 while you actually made $50 (you put in $1,000 and now have $1,050).

              Or, you buy $1,000 of vtsax, and it gains $100. You also buy $1,000 of vfiax, which stays flat but pays a $100 dividend. One fund is now worth $1,100, but the other fund is also worth $1,100, and the cost basis for each is different while the net performance is the same.

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