What to Do If Your Brokerage Is Missing Cost Basis

Why missing cost basis matters

Cost basis is generally the amount you paid for an investment, adjusted over time for events such as reinvested dividends or other basis adjustments. You need basis to calculate gain or loss when you sell.

Brokerage firms report basis information to the IRS for many covered securities, but records can still be incomplete—especially for older positions, transfers between firms, noncovered securities, or inherited assets. FINRA notes that if you lack adequate records, you may have to rely on what the firm reports—or treat basis as zero, which can increase tax owed.

A practical document checklist (not tax advice)

If basis looks wrong or blank, gather evidence before making irreversible sales decisions. Useful materials often include trade confirmations, monthly or year-end brokerage statements, prior firm statements from before an account transfer, 1099-B forms, dividend reinvestment records, corporate-action notices, and any correspondence about transfers or corrected tax lots.

This checklist is organizational. It is not a substitute for advice from a CPA or enrolled agent who can interpret your facts, forms, and filing options.

What you can and cannot expect from records software

Organizing statements and linking confirmed events back to source PDFs can make gaps visible and reduce the chaos of scattered files. Software cannot invent missing purchases, guarantee that reconstructed figures will be accepted by the IRS, or replace professional judgment.

Investment Vault is designed to help you import supported PDF brokerage statements—including scanned records processed with on-device OCR—review extracted candidate events, identify potential gaps based on what you provide, and keep confirmed ownership events linked to supporting documents—processed locally on your device. It does not connect to brokerages, file taxes, or claim certainty where evidence is incomplete.

Special cases: transfers, inherited shares, and noncovered positions

Basis gaps cluster around a few recurring situations. After an ACATS or other broker-to-broker transfer, the receiving firm may not carry forward complete basis history from the delivering firm. Noncovered securities—generally those acquired before broker basis-reporting requirements began—were never required to be reported to the IRS by the firm at all. Inherited shares follow different rules entirely: basis is typically adjusted to fair market value as of the date of death (a "step-up" in most cases), not the original purchase price, per IRS guidance and broker education on inherited-stock basis.

In each case, the practical task is the same: gather what documentation exists—delivering-firm statements, date-of-death valuations, estate paperwork—before treating basis as unknown or assuming the lowest-basis, highest-tax outcome by default.

When to contact professionals

Contact your current broker’s cost-basis or tax-lot support if firm records look incomplete after a transfer. Speak with a tax professional before relying on reconstructed figures for a return. For complex estates, transfers, or multi-decade histories, professional help is often essential.