Shareholders, please review this important information regarding Cost Basis Reporting Regulations and your account.
As part of the Emergency Economic Stabilization Act of 2008, Bridgeway Funds will be responsible for tracking and reporting cost basis information to the IRS on the sale or exchange of shares you acquire on or after January 1, 2012 (“covered shares”). Cost basis is the cost of the shares you purchased, including reinvested dividends and capital gains distributions. When you sell covered shares (shares acquired on or after January 1, 2012) in a taxable account, the cost basis accounting method you choose determines how your gain or loss is calculated. You are still responsible for calculating and reporting the cost basis for shares acquired before January 1, 2012.
The new tax regulations also require that mutual funds elect a default methodology to perform the required reporting. As a result, Bridgeway Funds has chosen the Average Cost Method as the default tax lot identification method for shareholders who do not choose a cost basis method. This is the method Bridgeway Funds will use to determine the cost basis for the shares sold and is the method in which ”covered” share sales will be reported on a shareholder’s Form 1099 if you do not choose a cost basis method.
You can choose the method used for your account, so please consult your tax professional to determine which method below should be considered for your individual tax situation. Information can also be obtained by visiting the IRS website atwww.irs.gov. Bridgeway Funds and their affiliates and agents cannot provide tax advice.
Calculates your gain or loss on shares sold based on the average purchase of all the covered shares you own.
FIFO (FIRST IN, FIRST OUT)
The shares purchased first are sold first.
SPECIFIC LOT IDENTIFICATION
You specify the share lots in your account to be redeemed or exchanged, each time shares are sold. For systematic redemptions, your shares will be sold using FIFO (First In, First Out).
LIFO (LAST IN, FIRST OUT)
The shares purchased last are sold first.
HIFO (HIGHEST IN, FIRST OUT)
The highest-cost shares are sold first.
If you do not designate the cost basis method to be used prior to or at the same time of a redemption of covered shares, your trade will be processed using our default method of Average Cost.
Print out the Cost Basis Election Form at the bottom of this page
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