Book cost of an investment

tony · Post by **tony** » Thu Mar 30, 2017 10:33 am

is "Income re-invested" added to the book cost?
e.g.

date amount

1 $1000
30 income reinvested $1

total $1001

nelsona · Post by **nelsona** » Thu Mar 30, 2017 10:39 am

In what context?
If it is a taxable investment, then, yes, the income that you report as taxable income and reinvested is then added to the adjusted cost basis. This is basic investment tracking.

If this is in an RRSP and you are not reporting the income year-by-year, then, no, your book value on the day you became a US taxpayer is unaffected.

tony · Post by **tony** » Thu Mar 30, 2017 11:29 pm

Thanks for the prompt reply.
That's federal tax.

1.However, don't I have to report year by year in california tax return?
2. is it then $1 the basis to calculate the tax?

nelsona · Post by **nelsona** » Fri Mar 31, 2017 9:19 am

Reread my answer, I covered both cases.