M1 Finance... unclear how they'll handle non-covered shares

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bbrock
Posts: 1332
Joined: Mon Nov 23, 2009 7:55 pm
Location: CA

M1 Finance... unclear how they'll handle non-covered shares

Post by bbrock »

Hi,

I've been back and forth with M1 customer service for some time attempting to figure out how they'll handle the cost basis for non-covered shares of VTI or VXUS in my taxable brokerage account. I know they use a minimum tax method, not specific id, but I continue asking them how can I either upload or provide them the client-maintained records for the cost basis of my non-covered shares, and they don't have an answer.

Looking at only my VTI position, I have mostly non-covered lots. I maintain the cost basis of these lots. M1 uses Apex Clearing. Do I handle this issue with Apex? Has anyone been in this position before moving non-covered lots in a taxable brokerage to M1?

I am really intrigued by M1 and they seem like a solid option to hold my only two taxable holdings (VTI, VXUS). I may be giving something up with regards to taxes and not being able to use Spec ID, but at the sake of simplicity, and a more hands-off approach that could be assumed by my spouse, if something happened to me, perhaps M1 could fit this bill.
bbrock
Topic Author
bbrock
Posts: 1332
Joined: Mon Nov 23, 2009 7:55 pm
Location: CA

Re: M1 Finance... unclear how they'll handle non-covered shares

Post by bbrock »

One thought though, since these are non-covered shares, they are not reported to the IRS, rather the client is responsible for that reporting. Looking at my spreadsheet for these non-covered lots of VTI, I bought some at approx. $40/share and others at $60/share. The avg. price paid as reported on Vanguard's system is approx. $64/share. Can I just use and report their data for these non-covered shares?

I assume that is what M1 would use anyway. I think the average price paid though for these 21 lots of non-covered shares would be closer to $46.24/share though.
Last edited by bbrock on Mon Oct 03, 2022 11:58 am, edited 2 times in total.
bbrock
Topic Author
bbrock
Posts: 1332
Joined: Mon Nov 23, 2009 7:55 pm
Location: CA

Re: M1 Finance... unclear how they'll handle non-covered shares

Post by bbrock »

Anyone familiar with M1?
bbrock
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