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Covered Securities

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Definition: A covered security, in a tax context, refers to investment securities for which a broker is required to report the cost basis to the Internal Revenue Service and to the owner. A covered security is:
  • any stock in a corporation acquired on or after January 1, 2011,
  • mutual fund shares acquired on or after January 1, 2012,
  • stock in a corporation purchased through a dividend reinvestment plan acquired on or after January 1, 2012, and
  • notes, bonds, commodities (and derivatives or contracts based on commodities) acquired on or after January 1, 2013.
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