Stock/mutual fund cost basis?

How does gaineskeeper and other software calculate cost basis? I am asking since I bought some stock and reinvested the dividends, the price of the stock I bought was around 48-52$, while gainskeeper gives the cost basis as $98! how is this possible? I do not want to end up with problems in my tax returns due to this. Can someone please help?

I believe you are having problems, because of the reinvestments. You should first, only report the initial quantity stocks @ price and the date. Then with each reinvestment, and new quantity @ price, and date. Although I am not familiar with "gains keeper, I am pretty familiar with personal taxes, schedule D and Turbo tax.
These programs eventually will ask you when you sold some of these, the quantity @ price, and date. Either figure first in first out, or first in last out. Personally I like FIFO best.

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