How to carry cost basis across a brokerage account transfer

The short way

A transfer between brokers moves two things on two different clocks, and a tracker only stays right if you wait for the second one.

The shares move fast. In the US, account transfers between member firms run through ACATS under FINRA Rule 11870. You start it at the receiving broker; the old broker has one business day to validate the instruction and three business days after that to complete the transfer. The rule is about positions and cash balances. It says nothing about what you paid for them.

The cost moves on its own document. The IRS's Form 1099-B instructions require the transferring broker to send a transfer statement within 15 days after the transfer settles, carrying each security's adjusted basis and original acquisition date. So for a week or two the new account can show your positions with the cost blank, and then fill it in.

So, in order:

1. Before you start the transfer, download the old broker's lot-level report of what you hold — usually called unrealised gains, cost basis or tax lots — showing every lot with its date and cost. After the account closes, that page goes with it.
2. After the shares arrive, wait for the cost to follow. Then compare the new broker's lots against your saved report, one holding at a time.
3. In your tracker, record a transfer, not a trade. Each lot keeps its original date and original cost. Which button that is depends on the tracker, and is the next section.

What the options are

A tracker built around the person rather than the account. Sharesight's help on broker transfers is short: in most cases you do not need to do anything, because the portfolio belongs to you rather than to the broker, and the trade history, cost base and acquisition dates simply continue. If you keep one portfolio per broker, it documents a Transfer out in the old portfolio — entered at the market closing price, with no gain or loss recorded — and an Opening balance in the new one, with the total cost base set to the sender's original. One caution for US and UK investors: Sharesight's own sold-securities report outside Australia, New Zealand and Canada is computed on average cost, so its lots are not the broker's lots.

A ledger you keep yourself. Portfolio Performance has a transaction type for exactly this, Delivery (Inbound): shares added to an account without any cash leaving one. Enter one per lot, dated and priced as the old broker's lot report says. If both accounts already live in the same Portfolio Performance file, moving a position between its securities accounts is a transfer within the file rather than a new delivery.

A tracker that matches sales to parcels. Navexa's Australian plans match every sale to the purchase parcels it came from and apply the capital gains discount parcel by parcel, which only works if the parcels came across with their real dates. Five matching methods exist, but choosing the parcels yourself is on Premium only. Portseido breaks each position into purchase lots with a cost and holding days per lot, under FIFO, LIFO or average.

Tax software for US filers. TradeLog does not try to follow a transfer inside a portfolio view. You give it a one-time baseline of the positions held at the start of your first tax year, with their original dates and cost, then import a full year of history for each account. It is the one card here that adjusts wash sales across separate accounts, which a transfer midway through a year makes more likely to matter.

Where this breaks

Recording the transfer as a purchase. The commonest mistake, and it breaks three things at once. Every lot's cost becomes the transfer-day price, so every future gain is wrong. Every lot's holding period restarts, so a long-term holding reads as short-term. And most trackers treat a purchase as new money invested, so the return chart shows a large deposit on transfer day that you never made. Portfolio Performance's own manual suggests a delivery at the current date and price for inherited or gifted shares when no history exists — a sensible fallback for a value chart, and the wrong record for anything tax-related.

Older lots arrive with nothing attached. The transfer statement is required for covered securities. For stock, that broadly means shares bought for cash from 2011 on; shares in a dividend reinvestment plan or held on average basis became covered from 2012. Anything older is noncovered: the old broker does not have to send its cost, and on the new broker's 1099-B, when those shares are sold, the cost and date boxes may be left empty. The only copy of what you paid may be your own records — which is why step 1 comes before the transfer.

One merged row loses the lots. A broker or a tracker that shows 300 shares at an average cost is showing a summary of three purchases. Enter the transfer as that one row and the tracker has one lot, with one date. Every later sale then reports one holding period and one gain, where the broker, which kept the three lots, reports something different for the same sale.

Average against specific lots. IRS Publication 550 sets the default: shares sold are the oldest first unless you identify specific shares to the broker at the time of the sale, and an average basis can be elected for mutual fund shares and for shares in a dividend reinvestment plan. Two consequences for a transfer. A fund held on average basis arrives as an average, and a tracker that recomputes from the original lots will disagree with the broker about every sale. And a specific-lot instruction is given to the broker holding the shares when they are sold, so after the move it is the new broker's settings that apply, not the old one's.

The basis that arrives is already adjusted. The transfer statement carries the adjusted basis — after the old broker's own wash-sale adjustments and any corporate actions it processed. A tracker rebuilt from your raw trades will not have those adjustments and will disagree, by exactly their amount. That gap is explained under wash sales, and reconciling it is its own task.

Partial transfers split a holding in two. Move half a position and the lots must be divided between the two accounts. Which lots went is whatever the old broker chose; your tracker needs the same choice, or the two accounts' lots and the tracker's will not add up.

If you outgrow this

When the transfer brings years of history with it, the import of the old account is its own job; importing a broker's CSV into a tracker covers what goes wrong with the file.

When the number goes on a return, the broker's 1099-B and your own lot records are what an accountant reconciles; a tracker's lot view is the working copy. What each lot method does to a gain is under cost basis. This page describes the mechanism; it is not tax advice, and the rules above are the US ones.

The rest of the category is portfolio trackers.