The cost basis is not directly adjusted by the daily index ratio. In the case of a discount that is not accrued each year that a TIPS is held, the current cost basis is the purchase price for the principal (9587.89) plus the inflation-adjustments made to the principal of the TIPS since the purchase (7000*(1.48078-1.44109)).I have built a TIPS ladder in Fidelity and am trying to reconcile the Fidelity cost basis (which adjusts daily) with my own calculation in my tracking spreadsheet. But the cost basis are not matching up.
Here is one specific transaction example for a 2041 TIPS purchase:
Bought 1/14/2025
Settlement 1/15/2025
Qty: 7
Price (unadjusted): 95.046
Inflation adjustment: 1.44109
Cost basis: 7 * 95.046 * 10 * 1.44109 = 9587.89
This cost basis matches Fidelity trade confirmation and total transaction amount (not including accrued interest, which I didn't include here as it is not relevant to cost basis question).
Today 1/12/2025
Inflation factor: 1.48078
Updated cost basis, my calculation: 7 * 95.046 * 10 * 1.48078 = 9851.96
(I thought it could be off by a day or two, but the difference is greater than daily adjustment for a few days).
Fidelity's reported cost basis: 9866.58
The updated cost basis is not matching up with Fidelity's. This is the case for all my TIPS transactions.
Why does this matter: In my tracking spreadsheet, I want to accurately track performance with and without inflation adjustment. And also, just to fully understand all mechanics of TIPS in general.
Any ideas on this discrepancy?
That is likely not exactly what Fidelity shows because (1) the current index ratio used by Fidelity is likely for the next business day rather than for this day and (2) details about the rounding of intermediate values.
Statistics: Posted by FactualFran — Wed Nov 12, 2025 11:14 pm — Replies 5012 — Views 738561