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Financial Planning / Tax Strategies


Subject:  Re: Claiming Cap. Loss Date:  12/9/1997  1:56 PM
Author:  KATinChicagoland Number:  853 of 127617

<<I have a question about claiming capital loss from a stock investment. I bought 400 share some stock at $25 13 months ago. I bought another 400 at $18 10 months ago. Now the stock is at $10 and I would like to sell a portion of the 800 shares to claim some loss. I have no other capital gain in my return this year. How do I calculate the cost basis of the stock if, say, I sell 200 shares?>>

Unless you specify otherwise, the tax law will assume that the first shares you sell are the first shares you acquired. This is probably the result you want, because your older shares have a higher basis. A sale of 200 shares at $10 will produce the $3,000 loss you're looking for.

If you were in the opposite situation (older shares with lower basis), you would want to identify the shares you are selling. I believe Roy has a FAQ on this issue.

KAT in Chicagoland
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