different average basis for covered and uncovered securities?

If by "covered" you mean covered by the law requiring them to track basis (2012) and you bought before and after 1/1/2012, maybe they're right, and maybe they're wrong. I think I know what happened. In their books they started with zero as of 1/1/2012, so the covered would be the average basis for this subset. The uncovered would be the subset bought before that date. Are the numbers right using that assumption?

However, for tax purposes you have only one universe and one average basis. If you want to spend the time, you could chat them up. Personally, I wouldn't waste the time. Once you have the 1099-B it will be easy to fix no matter how they report. Unless you've previously used average basis for this fund you might want to take a look at a different method, which may give you a lower total gain. There's more information in IRS Pub 550 and 564.

Phil Marti VITA/TCE Volunteer Clarksburg, MD

I discovered that they are, according to IRR 1.1012-1(e)(10)(iii).

Generally, the average basis method applies on an account-by-account basis. There should be only one average basis for each account.

It is was in that vein that I thought the same average basis should apply, since all the shares were held in a single brokerage account, and I disposed of all held shares at the same time.

However, generally, a covered security [1] "is treated as held in a __separate_account__ from stock that is a non-covered security".

Thus, I infer the average basis for covered and uncovered securities is calculated separately.

(Unless the broker chooses the single-account election. Obviously, my broker did not.)

----- [1] And yes: for the purpose of my question, "covered security" refers to shares acquired on or after Jan 1, 2012 for which the average basis method may apply.