How do I receive permission to change my cost basis calculation to adopt the average cost basis and to whom should I send the letter?
You do not need permission to elect an average cost basis method for a particular mutual fund when you have used a cost basis previously to report the sale of shares in the fund. If you meet the conditions to use an average basis, then you just need to clearly indicate on the return for which you want the election to be in effect that you are making the election. You also need to indicate which average basis method you are using and that none of the shares are gift shares. If there are gift shares in the account, you must include a statement that the basis for gift shares when figuring the average basis is the fair market value at the time of the gift. If you have already reported the sale using a cost basis, you cannot make this election unless you can do it on an amended return before the due date of the tax return being amended. However, you do need the consent of the IRS to use a cost basis or change your average basis method once you have made this election to use an average basis
