How do I calculate my gains and/or losses when I sell a stock?
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.
To begin, you need to know your cost basis, or the price you paid for the stock. If you did not record this information, you should have an order execution confirmation and/or an account statement that covers the date of your purchase with the purchase price. Next, you determine the stock's selling price from an order execution confirmation and/or your brokerage account statement. The difference between the buying and selling prices is your gain or loss per share, which, when multiplied by the number of shares involved, gives you a total dollar amount for the transaction. If you want to further refine this number, you can add and subtract, respectively, the brokerage commissions related to the total stock purchase amount and the total stock sale amount.
Next, if the stock is in a taxable account (non-IRA or non-retirement), you will also have to consider the tax consequences. Under the current U.S. tax code., if you hold the stock for less than one year, the capital gain/loss will be considered as short term and will be calculated as ordinary income (loss) for tax purposes. If you hold the stock for more than one year and have a capital gain, it will, in most cases, be subject to the current beneficial capital gains tax of 15%. (To learn more, read A Long-Term Mindset Meets Dreaded Capital-Gains Tax.)
Let's look at an example of making a stock gain/loss calculation. Suppose that you buy 100 shares of XYZ stock on August 1, 2016, for $20 a share and sell 50 shares of this holding 13 months later on September 1, 2017, for $25 a share. On a per-share basis, you have a long-term gain of $5 per share. Multiply this amount by 50 shares and you have a long-term capital gain (15% tax rate) of $250 (50 x $5).
Investors need to remember that if a stock splits, they must also adjust their cost price accordingly. For example, if the stock purchase price was $25 and it split 2 for 1, the cost basis would be adjusted to $12.50 per share. (To learn more, see Understanding Stock Splits.)
Good Question, most firms provide a 1099 and gain loss summary at the end of the year, so you won't have to do this.
And most firms have a gain/loss tab for realized and unrealized gains/loss on their website.
If you're asking for a performance report type calculation, that's a more difficult question, but most RIAs should provide you with a report on a portfolio quarterly, discount brokers most likely won't have this feature.
Buy Price - Sell Price = Loss or Sell Price - Buy Price = Gain (excluding dividends). And this is a nominal return, it doesn't factor in inflation.