Average Basis
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Definition of Average Basis:
A much easier way of calculating your basis for shares of stock or mutual fund sold, when different shares are bought at different prices. To find your average basis using the single-category method, add up the total cost of all the shares you own, divide that by the number of shares you own and then multiply that number by the number of shares you sold. The double-category method is exactly the same except you first divide your shares into long-term and short-term holding periods so you have an average short-term basis and an average long-term basis.
