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© 2023 SEI 5 Cost Basis Reporting and Cost Adjustments The original cost basis of an investment is typically the purchase price, including any sales charges that were paid when originally purchased, and may be adjusted during the time period that the investment is held. Generally, cost basis is provided in the Agent/Custodian Tax Form for sales that occurred in the tax year covered by the Letter. If the cost-basis information is missing, a "Detail of Sales with Unknown Cost Basis" will be provided on the Tax information statement that follows the 1099. Reinvested Dividends and Capital Gains For tax purposes, these reinvestments are considered additional purchases made at the net-asset-value share price on the day the transaction occurred. It is a prudent business practice for your clients, and you as the advisor, to keep any statements that include the date, share price and number of shares that are bought through reinvestment. Amortization of Bond Premiums, Market Discounts and Original-Issue Discounts on Certain Fixed-Income Securities For certain fixed-income securities purchased at either a premium or discount (with the appropriate taxpayer elections as required by the IRS) and for original-issue-discount securities, the cost basis should be adjusted as appropriate to be equal to par value at the time of maturity. These adjustments (amortization/accretion) will either increase or decrease the cost basis depending on whether the security was purchased at a premium or discount. Return of Capital Several types of "collective" instruments, including Mutual Funds, REITs and Unit Investment Trusts, pay periodic income to holders throughout the year, based upon estimated earnings of underlying holdings. Should the fund find after the end of the year that income paid exceeds income earned; the excess is reclassified as return of capital. A return of capital is a non-taxable distribution and is a return of the investor's cost. A return-of-capital distribution reduces the cost basis in the investment. Income Reallocation In early February, some assets will also perform Income Reallocation (IR) of income paid in 2022. This is to separate the income's tax character to be specific between taxable and tax-exempt income. If the asset issuer has not provided SPTC with final IR factors, your clients 1099 will remain on hold until they are received. Sometimes assets make corrections to the original IR information provided to SEI Private Trust Company. If a correction is made, SPTC will issue a corrected 1099 to the client with the updated IR information Covered and Non-Covered Securities A security is considered covered if 1) the security is purchased or acquired after its corresponding applicable date outline in the Emergency Economic Stabilization Act of 2008 or 2) the asset is transferred to that account from an account in which that asset was a covered security (but this only applies if the custodian receiving the asset receives a statement from the transferring custodian). The 1099-B (form reports the total net proceeds from the sale of stocks, bonds, futures contracts, or mutual funds during the prior calendar year) will have separate sections for covered and non-covered securities. The two sections are needed to comply with the guidelines established by the Emergency Economic Stabilization Act of 2008. For covered securities, both the gain/loss information and the cost basis information will be included on the 1099-B and transmitted to the IRS. For non-covered securities, only the gain/loss information will be transmitted to the IRS. Assets are considered covered if they were purchased on or after the following dates: Stocks (other than stocks held in a regulated investment company [RIC] or dividend reinvestment plan [DRP]) – January 1, 2011 Mutual funds, DRPs, and RICs – January 1, 2012 All other specified securities, including fixed-income securities and options – January 1, 2014.

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