A good and timely article at The WSJ regarding cost basis accounting. If you have non-qualified investments or non-qualified investment accounts, you will want to be aware of this. Many will find these new rules very beneficial when it is time to compute their taxes.
Mutual-fund sponsors and dividend-reinvestment plans (DRIPs) have until Jan. 1, 2012, to comply. So if a customer holds both stocks and mutual funds within one brokerage account, the new law applies to the stocks in 2011 and the funds in 2012.
The effective date for exchange-traded funds varies. Stevie Conlon, tax counsel at Wolters Kluwer Financial Services, says many ETFs fall under the 2012 rule. But some—such as foreign ones classified as stock—are subject to the 2011 rule.
~WSJ
Read the full article for information about joint accounts, average daily cost basis for multiple executions and FIFO/LIFO treatment.