New tax regulations require us to report cost basis to you and the IRS for redemptions of covered shares, generally shares acquired after January 1, 2012. We will determine your cost basis using our default method, unless you elect another method. The Oak Associates Funds default method is Average Cost. If available, we will also determine your cost basis for noncovered shares using the Average Cost method.
You do not need to take action if you would like us to determine the cost basis of your covered shares using our default method, Average Cost. To elect a different cost basis method, click here for a Cost Basis Election Form.
Important: The method you elect will apply to future redemptions. If you are changing from Average Cost to another method, the basis of shares acquired before the effective date of the change will remain averaged. You may also be eligible to revoke Average Cost and elect to have your basis determined retroactively using a different accounting method. If you are considering a revocation rather than a change, please contact us to determine your eligibility.
Definitions:
Average Cost – The cost of shares is determined by averaging the price paid to acquire shares. The shares acquired first are redeemed first.
Covered Shares – Generally, shares acquired on or after January 1, 2012. The cost basis for redemptions of covered shares is reported to the IRS.
FIFO (First In, First Out) – The shares acquired first are the first shares redeemed.
HIFO (Highest In, Highest Out) – The shares with the highest cost are the first shares redeemed.
LIFO (Last in, Last Out) – The shares acquired last are the first shares redeemed..
Low Cost – The shares with the lowest cost are the first shares redeemed
Noncovered Shares – Generally, shares acquired before January 1, 2012. The cost basis for redemptions of noncovered shares is provided as a curtsey and is not reported to the IRS.
Specific Share Identification – The shares identified by the shareholder at the time of each redemption are the shares redeemed. If shares are not identified, shares will be redeemed using the FIFO method.