BIVIO uses FIFO when selling mutual funds. Our brokers uses average cost method for mutual fund sales. A lot of mail here says "need to make an adjustment in BIVIO" to match broker. Is there a help page that shows how to make adjustments?

OR because The difference is 8 cents and cost basis is not reported--do I have to make an adjustment?

Dear Linda,

Average cost is a default option for mutual funds. However, prior to purchases starting in 2012, while your broker may have kept records that way, it was only information for you. What mattered was how you were actually reporting the sales on your taxes. If your club didn't change anything in bivio, you've been reporting them on a FIFO basis and you cannot change those old transactions now. You should not try to make adjustments to show the broker numbers. They are not being reported anyway.

It gets more complicated with purchases of mutual funds and ETF's starting in 2012. Your broker now has to report cost basis when those shares are sold. Unlike stocks, brokers have the option to choose average cost as the default "cost basis method" for selecting lots in a sale. You can change this prior to a sale being settled and we highly recommend you do that to keep your club record keeping as simple as possible. Go to your broker and tell them that you want all ETF and mutual fund sales to use FIFO (First In First Out) as the default cost basis method. Unless you do this, you will have some surprises at tax time and your club record keeping will get more complicated.

Laurie Frederiksen
www.bivio.com