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FAQs



Cost Basis

Why is cost basis reporting required?

The requirement is part of the Emergency Economic Stabilization Act that was intended to improve compliance with tax laws and raise revenues to fund the Troubled Asset Relief Program (TARP), which is sponsored by the U.S. Department of the Treasury. Specifically, the legislation requires an expansion of the current reporting on IRS Form 1099-B. The requirement impacts equity securities, mutual funds and debt securities purchased on or after specified dates. For mutual funds, cost basis information is required for shares purchased on or after January 1, 2012. It does not affect annuities, life insurance, money market fund accounts with a stable net asset value (NAV), retirement accounts or Coverdell Education Savings Accounts.

My mutual fund account was established prior to the effective date (January 1, 2012). Will I receive cost basis information on shares in this account?

It depends. For cost basis purposes, shares will be classified as "covered" or "noncovered."

  • "Covered shares" are shares purchased on or after the effective date for which cost basis information is provided to you by the broker/mutual fund company.
  • "Noncovered shares" include shares purchased before the effective date and shares purchased on or after the effective date for which cost basis information is unavailable. The information may be unavailable because the broker/mutual fund company does not have sufficient information to track the cost basis. Cost basis information on noncovered shares is not required to be provided but may still be provided to you (but not the IRS) for your information. You can choose to use cost basis information provided on noncovered shares or calculate your cost basis on your own. 

What cost basis information is available for noncovered shares in my Thrivent Mutual Funds account?

Thrivent Mutual Funds can only provide average cost information on noncovered shares. If you are using the average cost method for covered shares, average cost information will be provided to you for your noncovered shares when available. If you choose a method other than average cost for your covered shares, you can still choose to receive average cost information on your noncovered shares. In this case, all noncovered shares will be redeemed first using average cost. Once all noncovered shares are depleted, covered shares will be depleted using the elected cost basis method.

When will I be required to use the cost basis information provided by Thrivent Mutual Funds on my tax returns?

You (and the IRS) will receive cost basis information for all of your covered shares on IRS Form 1099-B. When available, you may receive cost basis information, either on Form 1099-B or a separate cost basis statement, for noncovered shares purchased prior to the effective date. Cost basis information on noncovered shares will not be provided to the IRS. You should always use IRS Form 1099-B to complete your tax return for covered shares. Information from other sources can change due to cost basis adjustments that may occur from other activity in your account. As stated previously, you can choose to use cost basis information provided on noncovered shares or calculate your cost basis on your own.

Can I change my cost basis election?

Yes, you may change the cost basis method used on your investment at any time. Once you change your method, it will be used on any sales of shares that occur after the change. You cannot change the method used on a sale that has already occurred. If you are changing from the average cost method and a redemption or sale of covered shares has already been processed on the account, the existing covered shares in your account are assigned the average cost basis. Future shares purchased after the change will retain their original purchase price as the cost basis. If you change from average cost and have not yet redeemed or sold shares from your account, all covered shares will retain their original purchase price for cost basis purposes.

How can I change my cost basis election?

You can change your election online by visiting Thriventfunds.com, in writing and, in some cases, over the phone. Contact the Customer Interaction Center for assistance.

Can I use a different cost basis method for a specific transaction?

For Thrivent Mutual Fund accounts, if you are using a method other than average cost, you can override the cost basis method at the time of the transaction and use a different method.

Will cost basis information always be available?

Cost basis information will be provided most of the time. Certain situations exist, however, where it may not be available. If you have cost basis information available, you can provide it to us so we can add and track it going forward.

What if I own shares of the same issuer in multiple accounts?

Thrivent Mutual Funds will provide you with separate cost basis information for the covered shares in each separate account. It is the shareholder's responsibility to make appropriate cost basis adjustments due to activity for the same security held in multiple accounts. For more information, please see IRS publications 564 – Mutual Fund Distributions and 551 – Cost Basis of Assets, or consult your tax advisor.

Hasn't Thrivent Financial been providing cost basis information?

Yes. Thrivent Mutual Funds has provided limited cost basis information as a service to shareholders for many years.

This information, however, was not provided to the IRS, and shareholders were not required to use the information to determine their gains or losses on the sale of shares. Going forward, Thrivent Mutual Funds will provide cost basis information based on the method you choose. This information will be reported to you and the IRS on Form 1099-B. It must be used when completing your tax return.

I am receiving inherited shares or gifted shares into my account. Will these shares have cost basis information?

It depends. If the shares were originally purchased by the owner before the effective date for cost basis reporting, these shares are noncovered shares. If cost basis information is available, it will be provided to you only (and not the IRS); you can choose if you want to use this information on your tax return. If the shares were purchased on or after the effective date, cost basis information will be available for these shares. Please note that you are not allowed to use the average cost method on gifted shares unless you agree to use the fair market value of the shares at the time of the gift as the cost basis for those shares.

If I transfer my account to or from NFS, will cost basis information be available?

It depends. If the shares were originally purchased by the owner before the effective date for cost basis reporting, these shares are noncovered shares. If cost basis information is available, it will be provided to you only (and not the IRS); you can choose if you want to use this information on your tax return. If the shares were purchased on or after the effective date, cost basis information will be available for these shares. Please note that you are not allowed to use the average cost method on gifted shares unless you agree to use the fair market value of the shares at the time of the gift as the cost basis for those shares.