How do I calculate my gains and/or losses when I sell a stock?

Stocks, Taxes
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August 2016
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The first step to figuring out gains or losses would be to determine your cost basis of the stock in question. Your cost basis is typically what you paid for the stock plus add in any commissions/fees that you paid to acquire the stock. For example:

You bought 10 shares of XYZ stock at 100/share = 1,000

You paid a commission of 50 bucks to your broker/trade platform

Total paid = 1050 as your basis you can then divide by 10 shares you own = your basis per share 

Next up you have to adjust your basis for dividends you may have gotten from the stock which were reinvested. So let's say your stock paid you $100 in distributions which you then paid tax on via a form 1099 DIV. You can now adjust your basis upwards:

1050 + 100 = New basis of 1150. 

Finally you the difference in proceeds from the sale will be your gain or loss. 

* The situation can potentially get trickier when you have stock splits that may have occurred or if you are working with stock that you inherited as well. 

 

June 2007
August 2016