Cost basis and capital gains
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 also considered separate purchases and should be
included in your calculations.
The difference between your cost basis and the amount you received when you sold or redeemed your shares represents
your gain or loss. If you held your shares as a capital asset, the gain or loss that you realize will be a capital
gain or loss and will be long-term or short-term, generally depending on how long you have held your shares.
A wash-sale transaction occurs when you sell shares at a loss and purchase the same or substantially identical
shares (including reinvested dividends) within a 61-day period, beginning 30 days prior to the sale and ending 30
days after the sale. With wash sales, you may not be able to claim some or all of the capital loss immediately. The
amount of any postponed loss is added back to the cost basis of the new shares you purchased in the wash-sale
transaction. When you eventually sell those shares, your average cost will reflect the postponed loss amount.
Effects of sales loads
Any sales load charges included in the cost basis of the shares purchased will result in a reduction of the capital
gain (or an increase of the capital loss) upon the redemption or exchange of the shares. However, special rules
apply to shareholders who have reinvestment privileges that allow them to use the redemption proceeds of their
original investment to purchase shares in another fund of the same mutual fund family without incurring an
additional sales load charge. A shareholder cannot include the sales load charge in the cost basis of acquired
shares if the shareholder redeems or exchanges those shares within 90 days of the purchase date and acquires new
shares in the same mutual fund family by Jan. 31 of the calendar year following the calendar year in which the
disposition of the original shares occurred for which the sales load charge is waived. Instead, the amount of the
sales load charge should be added to the cost basis of the newly acquired shares.
Long-term capital gains
Long-term capital gains distributions from a mutual fund are generally reported as long-term capital gains
regardless of how long you owned shares in a fund. However, if you owned shares for less than six months, received a
long-term capital gains distribution on these shares, and sold them at a loss, part or all of the loss on the sale
of the shares (which would normally be short-term based on the holding period) may be recharacterized as long-term
instead. The amount of the loss equal to or less than the long-term capital gain distribution is the amount which
will be recharacterized as long-term. The amount of the loss greater than the long-term capital gain distribution
remains short-term. See IRS Publication 550 or consult a tax advisor before making this calculation.
The average cost method
Generally, we have provided cost basis information on your Form 1099-B if you sold or exchanged shares in 2019 from
a taxable account opened in 1983 or later. However, we are only required to provide cost basis information to the
IRS for shares you bought in 2012 or later. For shares purchased prior to Jan. 1, 2012, such cost basis information
is provided as a courtesy to you and is not reported to the IRS. By default, Delaware Funds® by Macquarie
uses what is known as the average cost method to calculate your cost basis. This means that to arrive at one cost
figure, we average the cost of your shares. You should carefully review the cost basis information provided by us,
and make any necessary basis, holding period, or other adjustments when reporting these amounts on your federal
income tax returns.
Though this is the default method used by Delaware Funds by Macquarie to prepare your cost basis, you should
your tax advisor to determine whether the average cost method is the most suitable for you. Beginning with the
tax year, we are required to provide the IRS with the cost-basis information, for shares purchased on or after
1, 2012, subject to certain exceptions. For more details, read about the changes to cost basis reporting
If you or your tax advisor are using a method other than the average cost method for shares purchased prior to 2012,
your year-end account statements from previous years can be used to obtain purchase prices. If you did not save your
old statements, our shareholder service representatives are available to assist you. Call 800 423-4026 weekdays
9:00am to 6:00pm Eastern time.
For information on how to report mutual fund distributions on your federal tax return, please read the reverse
side of your Form 1099-DIV. If you have specific questions about IRS regulations or need additional assistance
in completing your tax return, you should consult your tax advisor or the IRS.