Assumptions and Limitations of Cost Basis and Gain/Loss Information on Fidelity's Tax Reporting Statement

The IRS permits different accounting methods to determine cost basis, each of which can result in different amounts of taxes owed. You generally must use the same method for all your shares of a particular security even if the shares are held in different accounts, however, you can use different methods for different securities. Unless otherwise specified, Fidelity determines cost basis at the time of sale based on the average cost-single category (ACSC) method for open-end mutual funds and based on the first-in, first-out (FIFO) method for all other securities.

Average-Cost, Single-Category (ACSC) Cost Basis Method

The ACSC method may only be used for mutual funds, and taxpayers must elect such method on their tax return. If you choose the average cost calculation method, you may not change to another method without IRS approval. You may be able to use this method for your shares of a particular fund if (1) You redeemed shares of that fund in the tax year currently being reported or earlier and you’ve used the ACSC method to report all previous sales or redemptions of shares of that fund OR (2) This is the first tax year you redeemed shares of that fund and you plan to use the ACSC method for subsequent sales or redemptions of shares of that fund.

Specific Share Identification Cost Basis Method

For the specific share identification cost basis method to be used, appropriate instructions must be given before or at the time of the trade, and the method will be indicated with the letter "s" on the Tax Reporting Statement. If specific shares were selected manually rather than electronically, if some or all of the tax lots you specified do not correspond with Fidelity records, or if you used the specific share identification method before such method could be tracked by Fidelity systems, then cost basis and gain (loss) information shown for such transactions was based on the first-in, first-out (FIFO) method. Affected customers will need to refer to their trade confirmation for the shares (tax lots) they specified and calculate their gain (loss) accordingly. Additionally, all cost basis and realized and unrealized gain (loss) information based on the first-in, first out method may need to be re-calculated to remove the effect of any tax lots that were specifically identified and allocated to other sales.

General Limitations on Use

Fidelity-provided estimated cost basis (including cost basis and short sale proceeds information provided to Fidelity by customers), realized gain and loss, and holding period information may not reflect all adjustments necessary for tax reporting purposes. Taxpayers should verify such information against their own records when calculating reportable gain or loss resulting from a sale, redemption, or exchange. Fidelity does not report such information to the IRS or other taxing authorities and is not responsible for the accuracy of such information taxpayers may be required to report to federal, state, and other taxing authorities. Fidelity makes no warranties with respect to, and specifically disclaims any liability arising out of a customer’s use of, or any tax position taken in reliance upon, such information. Customers should consult their tax advisors for further information.

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