If you hold shares through Computershare, the cost basis in your account controls how much capital gains tax you pay when you sell. To check and correct the cost basis in Computershare, log into the Investor Center and compare the Form 1099-B against the lot-level transaction history; if the basis is missing, zero, or wrong, fix it on your current tax return using Form 8949 and send Computershare the underlying documentation so future 1099-Bs come out right. A blank or zero basis almost never means the shares were free. It means someone failed to give Computershare the right number, and unless you correct it, the IRS will tax you on the full sale price as if it were pure gain.
Where to Find Your Cost Basis in Computershare
Log into the Computershare Investor Center and open the “Investments” or “My Account” area. Two documents matter. The first is the annual Form 1099-B, posted by mid-February for the prior tax year, which lists sale date, gross proceeds, and — for shares that qualify — the reported basis.1Internal Revenue Service. About Form 1099-B, Proceeds from Broker and Barter Exchange Transactions The second is the detailed cost basis or transaction history report, which breaks your holdings into individual lots with acquisition date, share count, and per-share cost. Many accounts also show a “Cost Basis Statement” summarizing active holdings in one place.
Compare the aggregate basis on the 1099-B to the lot-level detail. If they don’t reconcile, or if the 1099-B shows a blank basis where you know you paid something, you’ve confirmed the problem and can start working on the fix.
Accounting Method: FIFO by Default
Computershare processes partial sales First In, First Out, so your oldest shares sell first.2Computershare. Cost Basis and FATCA Information That’s often the worst outcome for taxes, because your oldest shares tend to have the lowest basis and the largest gain. You can override FIFO and identify specific lots, but only at the time of the sale.3Computershare. Cost Basis FAQ After the fact, you’re stuck with FIFO.
What Computershare Is Actually Required to Track
Whether Computershare is even responsible for your basis depends on when you got the shares. Stock acquired on or after January 1, 2011 is a “covered security,” and Computershare must track the basis and report it to the IRS on your 1099-B.4Legal Information Institute. 26 USC 6045 — Definition: Covered Security Stock acquired before that date is non-covered, and Computershare has no obligation to track or report a basis at all. Your 1099-B will show only the sale proceeds, with the basis field blank or marked “unknown,” and the responsibility for establishing basis sits entirely with you.
Why the Basis Is Often Wrong
Certain situations cause errors so predictably that they’re worth checking before you assume the number Computershare shows is right.
RSUs and ESPP Shares
This is the single most expensive error in Computershare accounts tied to employer stock. When Restricted Stock Units vest, the fair market value on the vesting date is reported as ordinary income on your W-2, and that vested value becomes your cost basis. If your employer never transmits the vesting price to Computershare, the 1099-B will show a basis of zero, and you’ll appear to owe capital gains tax on the full sale price — even though you already paid income tax on the vested amount. That’s double taxation.
Employee Stock Purchase Plan shares behave the same way. The discount you received shows up as W-2 compensation income, and the 1099-B basis typically won’t include that compensation component.5Internal Revenue Service. 2025 Instructions for Form 8949 You have to add it back yourself.
Inherited Shares
Inherited stock gets a stepped-up basis equal to the fair market value on the date the original owner died.6Office of the Law Revision Counsel. 26 USC 1014 — Basis of Property Acquired From a Decedent Decades of unrealized gains can effectively vanish at death. But Computershare won’t apply the step-up unless the estate executor provides the date-of-death valuation.7Internal Revenue Service. Gifts and Inheritances Without that document, the system may still show the decedent’s original purchase price, or nothing at all.
Gifted Shares
Gifted stock generally uses the donor’s original basis under the carryover rule.8Office of the Law Revision Counsel. 26 USC 1015 — Basis of Property Acquired by Gifts and Transfers in Trust One trap: if the donor’s basis was higher than the fair market value when they gave you the shares, the basis for calculating a loss drops to that lower fair market value. Computershare can’t figure any of this out without documentation from the donor.
Dividend Reinvestment
Every reinvested dividend is its own purchase lot with its own date and price. After a decade of quarterly reinvestments, you can have hundreds of lots, and data migrations can wipe out the detail. If lot history is gone, you’ll need to rebuild each purchase from old quarterly statements.
Splits, Spinoffs, and Mergers
In a stock split, your total basis stays the same but spreads across more (or fewer) shares. 100 shares at $15 becomes 200 shares at $7.50 after a 2-for-1 split.9Internal Revenue Service. Stocks (Options, Splits, Traders) 7 Spinoffs are harder: your original basis has to be split between the parent and the spinoff based on the relative fair market values right after the separation, and the parent company publishes an allocation percentage you’re supposed to apply to every pre-spinoff lot. Computershare should handle this automatically for covered shares, but the calculation is worth verifying, especially for spinoffs before 2011.
Wash Sales
Sell at a loss and buy substantially identical shares within 30 days on either side, and the loss is disallowed.10Office of the Law Revision Counsel. 26 USC 1091 — Loss From Wash Sales of Stock or Securities The disallowed loss gets added to the basis of the replacement shares. Computershare may not make that adjustment. If it hasn’t, your recorded basis is too low.
Fixing the Basis on This Year’s Tax Return
Correcting Computershare’s internal records helps future sales, but it doesn’t undo a 1099-B already filed with the IRS. For the current year, the correction happens on Form 8949.11Internal Revenue Service. About Form 8949, Sales and Other Dispositions of Capital Assets The corrected totals then flow to Schedule D and onto your 1040.12Internal Revenue Service. About Schedule D (Form 1040), Capital Gains and Losses
Report the transaction exactly as it appears on the 1099-B, then use Column (f) for the adjustment code and Column (g) for the correction amount.
Basis Not Reported to the IRS
Non-covered shares show up on Form 8949 under Box B or E. Enter Code B in Column (f), put the correct basis in Column (e), and enter -0- in Column (g).5Internal Revenue Service. 2025 Instructions for Form 8949 You’re supplying the basis the 1099-B didn’t include.
Basis Reported but Wrong
The classic RSU or ESPP case. Enter the basis exactly as the 1099-B reported it in Column (e), enter Code B in Column (f), then put the adjustment in Column (g) as a negative number equal to the compensation income already on your W-2.5Internal Revenue Service. 2025 Instructions for Form 8949 That’s the mechanism that stops double taxation. Don’t skip it.
Updating Computershare’s Records for Future Sales
To fix the basis inside Computershare’s system, contact them and provide documentation appropriate to the situation:
- Direct purchases: old trade confirmations or brokerage statements showing purchase price and date.
- RSUs and ESPP shares: grant notices, vesting confirmations, and the W-2 showing the compensation income.
- Inherited shares: the date-of-death valuation from the estate.
- Gifted shares: documentation from the donor showing original purchase price and date.
- DRIP shares: quarterly reinvestment statements showing each reinvestment date and price.
If you no longer have old statements, Computershare charges $10 per year to retrieve archived account statements.13Computershare. Schedule of Fees for Computershare Investment Plan (CIP) For holdings that stretch back decades those fees add up, but they’re minor compared to what you’d overpay at a zero basis.
When the Original Records Are Gone
If you cannot find original documentation, historical stock price data can establish what the shares traded for on a given date. Use the closing price on the approximate purchase date as a starting point, then account for any splits and dividend reinvestments between then and now. A documented reconstruction based on historical prices is a much better position than accepting a zero basis.
Amending Prior Years
If you discover after filing that you sold RSU or ESPP shares with a zero basis and never corrected it, you can amend on Form 1040-X. The window is three years from the date you filed the original return or two years from the date you paid the tax, whichever is later.14Internal Revenue Service. Topic No. 308, Amended Returns For a single year of incorrectly taxed employer stock sales, the refund can easily reach four figures, so it’s worth reviewing each year still inside that window.
Penalty Exposure
Cost basis errors run in both directions. Understating your basis costs you a refund. Overstating it without support can trigger the IRS accuracy-related penalty of 20% on any resulting underpayment, doubling to 40% for gross valuation misstatements.15Office of the Law Revision Counsel. 26 USC 6662 — Imposition of Accuracy-Related Penalty on Underpayments The defense is reasonable cause and good-faith effort: organized records of the basis you claimed, the documents you relied on, and any correspondence with Computershare. Keep them with your return.