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When you transfer stock from one broker to another, is cost basis sent to the new broker?

Here is my case:

I want to transfer some vested shares from Schwab EAC to plain old Schwab. Schwab EAC is just too painful to use and doesn't support things like Stop Limit orders.

I am wondering if when you transfer from one broker to another if cost basis is passed along with it as it matter of fact, if it never is, or if it depends on from the organizations involved.

  • For "covered" holdings (by lot) -- those bought in or after 2012-2014 depending on type -- they must transfer basis information because if/when you sell the receiving broker must report it to IRS on 1099-B. For non-covered holdings, it's legally at the option of the brokers, but now that systems must be in place for covered holdings I'd bet they'll go ahead and do everything. – dave_thompson_085 Apr 3 '16 at 11:27
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That will vary depending on the relationship between brokers. Ask the broker (esp. the one you're thinking of transferring to; they have more incentive to make the process easy and make sure your questions are answered).

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Just my experience, but I have had cost basis information transferred between two completely different brokers a couple times. After I sold some of those investments, the cost basis was reported to me but not to the IRS (I guess the new broker wasn't legally responsible to report cost basis from the old broker so they didn't). Within two divisions of Schwab I would definitely expect the cost basis to be transferred.

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