In the nonsense of the power money hungry US Congress they try to
divide dividends into 2 classes:

1. dividends paid from taxed company profits
2. dividends paid from non taxed company assets ie profits < dividend.

In case number 2 the dividends are not taxed but one is supposed to
deduct the dividend from the cost basis ie reduce the cost basis.

So, how is Money to know what basis the dividends?
As was said, for an IRA it makes no difference.

And, in case 1. they somehow justify double taxation using their lie
legal skills...
Those bastards.

arthur
==

On Tue, 2 May 2006 20:04:01 -0700, bobmoneyquestion
<bobmoneyquestion[at]discussions.microsoft.com> wrote:

- quote -

In microsoft.public.money, bobmoneyquestion wrote:


- quote -

You feel insulted?

http://www.askoxford.com/concise_oed/nonsequitur

Since the only use of "cost basis" is in computing taxable capital gains and
there is no such thing for a Roth IRA, I'm not sure why you'd care. I.e.,
cost basis is not relevant to a Roth IRA.

At any rate, even if this were a conventional investment account where gains
and/or dividends were taxable, the reinvested dividends ***are*** part of
your cost basis. They "pay" you the dividend, you pay tax on it, and then
reinvest it. You are reinvesting "after tax" money. It's no different from a
tax point of view than the money you put in in the first place. So, the
reinvested amount adds to your cost basis. That's how this cost basis stuff
works. I think that was Cal's point. I.e., except in accounts where cost
basis is irrelevant, reinvested dividends do add to your cost basis.

I'm sure Cal understood your question. This isn't a knock, but I think he
understood it better than you did--as noted above.

"bobmoneyquestion" <bobmoneyquestion[at]discussions.microsoft.com> wrote in
message news:C3D069A7-DD14-4A4D-87E5-CC307C14805C[at]microsoft.com...
- quote -

Cal learner...i didn't realize that this was a website where MVP's would
ridicule you for being confused about a problem. If this is beneath your
scope of expertise maybe someone else can help me.

I'll try to explain my problem again:

let's say i invest 1000 in mutual fund xyz(in a roth-ira) in 2005 and it
pays me 100 in dividends which are reinvested.

in a regular account my cost basis would jump to 1100 because of the
reinvested dividends and my return on investment would be calculated based on
nav vs. cost basis (1100)

in a roth ira wouldn't my cost basis remain at 1000 because i didn't have to
pay taxes on the dividends?

i'm showing in some of my roth - ira mutuals annual returns %'s that are
what i think are less than my actual returns because they are adding any
reinvested dividends or gains to my initial investment.

does this make sense or is this more of a "non sequitur"?

bob




that i would be ridiculed for my confusion about this problem...> "That is a
non-sequitur". i never heard that saying before but after googling it I
understand it know. ma
--
bob


"Cal Learner-- MVP" wrote:

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"Dick Watson" <littlegreengecko[at]mind-enufalready-spring.com> wrote in
message news:eRJOm94aGHA.3524[at]TK2MSFTNGP04.phx.gbl...
- quote -

Contributions to the cash account get archived. I think those transactions
are the focus of the report.
--
Chris Cowles
Gainesville, FL

The problem with the details note is that you have to maintain it.

BTW, it's an Investment. Unless they redesign archiving, you could archive
it 1,000 years from now and the Investment Buy would still be there.

"ameridan" <ameridan[at]discussions.microsoft.com> wrote in message
news:C87377B2-4D55-4E74-9042-9267C0F7B505[at]microsoft.com...
- quote -

Now that you mention it, IRA REGULAR CONTRIB would do it, but in 20 more
years I might finally have to archive my data file and I'd have to peice
together the information. It's nice to be able to look in the details and
see that IF I need some mula quick, I can pull $24K out of my Roth without
penalty.

"Chris Cowles" wrote:

- quote -

"ameridan" <ameridan[at]discussions.microsoft.com> wrote in message
news:BE6F8434-BF3A-495C-9DE3-93275FED0B68[at]microsoft.com...
- quote -

Would it not be effective to simply report on a specific payee in the
contributions account?

I think you are confusing "cost basis" with "contributions". Although they
start out as being the same amount, as you see, they diverge from each other.
The same thing happened to me and I resolved it by keeping a tally of the
contributions in the account details comments section.

"bobmoneyquestion" wrote:

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How's this:

I have $1000 in my left pocket.
I receive $1000 dividend and put it in the right pocket.
I buy $1000 worth of addition (new) shares.

Does it make any difference, and to whom, from which pocket I paid for
the new shares?

arthur
==

On Fri, 28 Apr 2006 18:14:46 -0500, Cal Learner-- MVP
<via_newsgroup[at]please.tnx> wrote:
- quote -

In microsoft.public.money, bobmoneyquestion wrote:

- quote -

That is a non-sequitur.

- quote -

I could try to explain why shares bought with dividends are
logically part of the basis. From a tax point of view, can we at
least agree that the "basis" of the shares is moot?

When calculating my cost basis for a mutual fund in a roth-ira, money
includes any reinvested dividends and capital gains to the cost basis thus
when generating returns that are not right.

because roth accounts are pretaxed any dividends or capital gains are not
taxed and should not be added to the cost basis.

i've gone into the account settings and checked that this account is a
retirement account and a roth-ira.

any suggestions on how to fix this so i can determine what my actual returns
are?
--
bob