The United States has a new law requiring brokerages to report the cost basis of sales on IRS Form 1099-B. For stocks purchased after January 1, 2011, financial services firms will have to report the cost basis for any of those stocks sold. The law rolls out reporting requirements over the next three years. 2011 is for stocks. 2012 brings the reporting requirements to dividend-reinvestment programs and mutual funds. 2013 brings it for bond, option, and other purchases.
Cost basis is the purchase price of the security at the date/time of transaction. It's common (and smart) when selling shares to specify exactly which shares to sell. One reason for this is to minimize capital gains by first selling the shares that you paid the most for. Doing this of course requires knowing the cost basis for all your shares and that gets heavy on the bookkeeping.
I think having this information tracked and reported by the brokerage firms will make life easier on the investors. Great news. However, what are the negative implications from this? It's certainly costly for the brokers. Are we already seeing repercussions?