Banks made a bit from gains on securities and cost-cutting, but fees from selling investment trusts and the like were unchanged from the year before.
The primary difference is the presentation of all System Open Market Account (SOMA) securities holdings at amortized cost rather than the fair value presentation required by GAAP.
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Beginning on January 1, 2011, brokerage firms, mutual fund companies, banks and transfer agents will be required to track and report the cost of securities to both the IRS and the investor.
Brokers and others will now have to report information on the cost basis of securities to investors and the IRS, in some cases as soon as Jan. 1, 2011.
With a separate account, the cost basis of the securities in your portfolio is yours alone.
Coming next is a "Sell Analyzer, " an online tool that will evaluate the cost-basis of securities in a portfolio and recommend which to sell for tax losses.
During our testimony we were amazed that the Senate Banking Committee was willing to allow industry insiders to claim ignorance regarding simple matters such as the cost of executing a securities trade.
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To claim the benefit of his cost basis in the securities sold and the foreign tax credit, he will have to prepare and file a U.S. income tax return for the year of the sale.
"I expect everybody will jump on the bandwagon now, " said Richard Bove, equity analyst at Rochdale Securities, who thinks that the cost to Goldman of defending lawsuits could be enormously expensive over the next few years.
The total cost of Vanguard's securities-lending program is well under 1%, says Tom Higgins, chief financial officer of the funds.
Note that brokerage commissions are reflected in the cost basis of the purchased securities or as a reduction of the proceeds from the sale of securities and not as an expense of the fund.
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Securities firms that provide investment research incur the cost of employing analysts to produce that research.
Brad Smith, an analyst at Stonecap Securities, wonders whether the bank will return its cost of capital.
It says that most investors would be better off simply buying a low-cost index fund that holds all the securities in the market rather than using either quantitative models or intuition in an attempt to beat the market.
Cost basis is used to calculate capital gains when securities are sold.
Each idea is referred to as a stock, and those mock securities are classified as "Savings Bonds, " which focus on cost-cutting, "Bow Jones, " which build on existing technologies, and "Spazdaq, " which describes ideas using entirely new technology.
James Antos, a banking analyst at Mizuho Securities in Hong Kong, says CMB needs to do better in managing its cost of funding.
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"There will, justifiably, be questions about the adequacy of management and emergency operational procedures on board which may have longer-term cost implications, " said Wyn Ellis, an analyst at Numis Securities.
And Congress is likely soon to require brokers to report to the Internal Revenue Service and to you not just the gross proceeds of securities sales (as they do now on form 1099-B) but also your cost basis.
While conclusive truth in the securities markets is impossible to find, the overwhelming evidence suggests that active management reliably generates increased cost, tax, and risk while reducing returns.
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The notion behind the yardsticks is simple: a company creates value only if the return on its capital is greater than the opportunity cost of it, or the rate that investors could earn by investing in other securities with the same risk.
Its traders pushed too far out on the ledge to make Merrill the leading bank in credit derivatives, a position that cost the firm dearly when the market dried up and Merrill got caught holding billions in securities with plummeting values.
This program to address legacy loans and securities is part of an overall strategy to resolve the crisis as quickly and effectively as possible at least cost to the taxpayer.
Although some CVRs are registered tradable securities, the majority are non-transferable because the issuing company does not want to incur the additional cost, disclosure obligations, and legal responsibilities associated with registering them with the SEC.
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To come around to the position that mortgage backed-securities should be avoided, a banker would have to conclude that the losses to these assets would exceed the cost of capital penalties.
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