Ms. Taylor purchased $25,000 of mutual fund shares. To date, the fund has paid her $1,000 of net investment income and $500 of capital gain distributions. If Ms. Taylor reinvested all of these monies back in the fund, the cost basis of her total investment is:
D. All dividends, interest, and capital gains reinvested into a mutual fund are added to the investor's total cost basis. The $1,000 Ms. Taylor received in net investment income and the $500 she received in capital gains are added to her original purchase of $25,000 when reinvested in the fund.