About Decoding Mandatory Cost Basis

Decoding Mandatory Cost Basis explains how investment cost basis works and how brokers report it, in plain language with worked examples. It is a companion to Decoding 65.

How the guides are written

Each page is based on primary sources: the Internal Revenue Code, Treasury regulations, IRS publications and IRS form instructions. The sources are listed at the bottom of each page. Examples use made-up, round numbers to make the arithmetic easy to follow.

What this site is not

This site is educational only. It is not tax, legal or investment advice, and it is not affiliated with the IRS or any broker. We don't sell products, run ads, or collect personal information. Pages are reviewed periodically; the "last reviewed" date is shown on each guide.

Last reviewed: November 2026