Investors often need to calculate their cost basis when determining capital gains or losses for tax purposes. To simplify this process, we have developed a free Cost Basis Calculator. In this article, we’ll explain how to use the calculator, provide an example, and answer some frequently asked questions.

### Formula

The cost basis of an investment is calculated as follows:

Cost Basis = Original Cost per Share × Number of Shares

The gain or loss is calculated as:

Gain/Loss = (Current Value per Share × Number of Shares) – Cost Basis

### How to Use

Using the Cost Basis Calculator is straightforward:

- Enter the original cost per share in the “Original Cost” field.
- Enter the current value per share in the “Current Value” field.
- Enter the number of shares in the “Number of Shares” field.
- Click the “Calculate” button.

The calculator will display the cost basis and gain/loss for your investment.

### Example

Let’s say you purchased 100 shares of a stock at $50 per share, and the current value is $60 per share. To calculate the cost basis and gain/loss:

- Original Cost per Share = $50
- Current Value per Share = $60
- Number of Shares = 100

After clicking “Calculate,” the calculator will display:

- Cost Basis: $5,000.00
- Gain/Loss: $1,000.00

### FAQs

**1. What is cost basis?**

- Cost basis is the original value of an investment, including any associated fees or commissions.

**2. How do I calculate cost basis for stock splits?**

- Adjust the original cost per share for the split ratio. For example, if you had 100 shares before a 2-for-1 split, double the original cost per share.

**3. Can I use this calculator for tax purposes?**

- Yes, you can use the calculator to estimate capital gains or losses for tax reporting, but consult a tax professional for accurate tax advice.

**4. What if I reinvest dividends or received additional shares?**

- Include the reinvested amounts and additional shares in your total number of shares.

**5. Is the calculator’s result accurate for tax reporting?**

- It provides an estimate. Consult a tax professional for precise calculations.

**6. Can I use this calculator for multiple investments?**

- Yes, you can use it for multiple investments separately.

**7. Is this calculator suitable for all types of investments?**

- It works for stocks, bonds, mutual funds, and similar investments.

**8. How often should I update my cost basis?**

- Typically, you update it when you buy or sell shares or receive additional shares through stock splits or dividends.

**9. Do I need to include taxes and fees in the original cost?**

- Yes, include any transaction costs, such as brokerage fees or taxes, in the original cost.

**10. Is this calculator really free to use?** – Yes, this Cost Basis Calculator is completely free to use, with no hidden charges.

### Conclusion

Our free Cost Basis Calculator simplifies the process of determining the cost basis and gain/loss of your investments. It’s a valuable tool for investors looking to manage their finances and report accurate tax information. Remember to consult a tax professional for specific tax advice and enjoy using this free calculator for your investment analysis.