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Cost basis is defined as the price you pay for an asset. It is used to determine the amount of gain or loss you will realize if you sell the asset. If a gain is realized, you may owe federal and state income taxes. If a loss is realized, you may be able to deduct the loss on your income tax return. Cost basis reporting applies only to covered shares of non-tax qualified accounts including:
The Economic Stabilization Legislation, signed into law in October of 2008, requires mutual funds to report cost basis information to shareholders and the IRS beginning January 1, 2012.
When opening a new account, you have the option to choose from the following cost basis accounting methods:
When you open a new non-tax qualified account, you will need to select a cost basis method.
Securities distributed by State Farm VP Management Corp.
Securities are not FDIC insured, are not bank guaranteed and are subject to investment risk, including possible loss of principal.
Neither State Farm® nor its agents provide tax or legal advice.