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Financial Planning / Tax Strategies


Subject:  Re: Long & short of stock sales Date:  3/29/1998  3:39 PM
Author:  DowDanny Number:  3111 of 127616

Dear GlowingFire,

I 'just happenned' to have a researched this topic recently, even called the IRS taxpayer hotline which pointed me to the exact line in the IRS pub 550 (page 29.30) dealing with "specific lot" identification.

The official IRS policy is that UNLESS you have a written confirmation from your broker indicating exactly which lot of shares were sold, then you have to report sales on a first-in, first-out basis. IN your case, this seems the most 'tax advantagious' in any case.

From your examples, it seems that (b) {long-term loss on first 100 shares, short-term gain on 400 shares} is the only possible method UNLESS you have specific written confirmation from your broker that you sold the 500 shares purchased in July 97.

{More details can be found on AFQ and Discount Broker boards within past 10 days, but since there are no longer message numbers, I can't be more specific}

Good Luck
- DD
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