The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: Re: Taxes on Investing Profits||Date: 8/4/2011 7:23 PM|
|Author: wsmit56||Number: 113845 of 121095|
Yes, you can use specific identification method if you have records to support the cost basis you are using, and your broker can execute a specific identification sale. However, per the IRS, once you choose a method for a particular fund, you must stick with it. That means that if, for a specific fund, you at one time used average cost basis to report basis, you must continue to use average cost basis. Below is an excerpt from an IRS frequently asked question posting.
Once you elect to use an average basis method:
You must continue to use it for all accounts in the same fund.
Tax Preparer Learning Systems, LLC
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