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Financial Planning / Tax Strategies


Subject:  CG Tax general question Date:  5/6/1997  3:56 AM
Author:  katzz22 Number:  13 of 127745

OK. Here's the scoop. After getting our finances in order and beginning our portfolio with index funds, we've tiptoed into the UV4+ strategy. Last month, we emailed our new online discount broker (DATEK) about selling the highest cost basis equities first. They said they use a FIFO method of selling shares, but that our taxes are our own concern 'cause they only report sells to the IRS, not buys.

Then last week, we emailed them (again!) with the request that they confirm
receipt of our email which included a standing direction to sell the highest
cost basis shares first. In the email, we made it clear that we would keep our
own detailed records to make the shares identifiable, but that we simply wanted
confirmation from them that they received our request. They emailed back with
"Your email has been received."

Here's our question: DOES this count? Is this what's meant by written proof of
our direction to our broker? (For more background on this, there's a FAQ in

Are Datek's methods kosher and can we keep our own records for tax
accounting purposes to specifically identify the shares we sell? ...'Discount'
broker isn't much of a discount if we end up shelling out more in capital gains
tax with FIFO. A more expensive regular broker that will keep our specific-ID
request on file might even be better. Right? If that's the case, then choosing
the right broker is a significant part of our tax strategy....

Thank you in advance for any feedback. Any responses are appreciated.
(please post to the board)
--- Nervous first-timers from Arizona
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