Cost basis requirements

What is cost basis?

To determine whether you have a capital gain or loss on shares you sold or exchanged, you must establish your cost basis. Cost basis generally is the price you paid for your shares, including any sales charges. Your cost basis may not be the same for all shares because the price may have varied if you made purchases at different times. Shares you acquired through reinvested dividends or capital gains are considered separate purchases and should be included in your calculations. The difference between the amount you received when you sold or redeemed your shares and your cost basis represents your gain or loss. In this way, your cost basis will help you determine how much you owe in taxes or can claim as a loss.

What is reported?

Delaware Funds by Macquarie is required to provide cost basis information to shareholders as well as the IRS on Form 1099-B. The requirement applies only to “covered shares” — shares that are purchased (and subsequently sold) after January 1, 2012. If your account is held by your investment representative (such as a financial advisor or other broker), please contact that representative with respect to reporting of cost basis and available elections for your account.

How are registered and beneficial owners impacted?

If you own your shares in a registered account, you will be asked to select a cost basis option. If you hold your shares in “street name” or other nominee, your broker will continue to control the tax election on the account.

What are covered shares?

• Covered shares are those purchased after January 1, 2012, including shares acquired via reinvestment of dividends and capital gains.
• Delaware Funds by Macquarie is required to report the cost basis information of these shares to both the shareholder and the IRS on Form 1099-B.
• Covered shares will begin to deplete after noncovered shares, unless otherwise instructed.

What are noncovered shares?

• Noncovered shares are those purchased prior to January 1, 2012.
• The cost basis of your noncovered shares will be calculated separately from the cost basis of your covered shares.
• Noncovered shares will be automatically depleted from your account first before covered shares.
• The cost basis of noncovered shares will not be reported to the IRS.

What are the key dates?

What default method does Delaware Funds by Macquarie use?

Redemptions of covered shares will be reported using the Average Cost method, unless another method is specified. No action is required if you choose to use the Average Cost method on all of your Delaware Funds account(s).

Additional information

In addition, you can obtain a copy of IRS Publication 550 (Investment Income and Expenses) by calling the IRS Forms Distribution Center toll-free number at 800 829-3676 or visiting the IRS website at irs.gov.

If you have any questions, please contact one of our customer service representatives at 866 437-0252 weekdays between 8am and 8pm ET.