Average cost method: Over time, your total investment is ($2,000 + $750) = $2,750. Since your total shares are 150 and the average cost per share is $2,750 ÷ 150 = $18.33, the cost basis for 120 ...

In that sense, lump-sum investing is preferable to dollar-cost averaging, but that's not always practical, and isn't even possible with an employer-sponsored 401(k) or similar account.

In concept, cost basis is simple: It's the price you paid for an investment. It isn't a worry for transactions made in tax-protected accounts, such as IRAs.Money withdrawn from those accounts is ...