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URL:  http://boards.fool.com/the-usual-thing-is-last-ink-first-out-unless-you-26791702.aspx

Subject:  Re: Dividend Reinvestment - A Tax Nightmare? Date:  7/6/2008  8:11 PM
Author:  lorenzo2 Number:  101277 of 121219

The usual thing is last ink first out unless you tell them otherwise in writing

No, the default is first in, first out (FIFO). But otherwise, brucedoe is right: it's not all that hard if you keep accurate records, and that's dead simple to do with a spreadsheet. In that case, it shouldn't take you more than a few minutes to calculate the cost basis of any sale.

(And as others have noted, you can't use an average cost basis - that's only an option with mutual funds. With individual stocks, you have to work out just which shares are being sold, and add up corresponding purchase prices. That's where the spreadsheet comes in. Or, if you wish, a pocket calculator. Either way is easy enough if you have good records.)

Lorenzo
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