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ok, i need to know if i've figured this out:

for individual securities, if i bought xyz company shares twice in one year,

50 shares @ $20/sh = 1000, c.b= 20/share
20 shares @ $40/share = $800, c.b=40/share

and sold all of the shares at the same time at $50/share (in the same year as purchased), since you cannot use an average cost basis for stocks, do i list the final transaction as separate transactions on my tax forms?

ie 50 shares sold at $50/share, gain of $1500 and
20 shares sold at $40/share, gain of $200?

or do i just calculate the two different gains and then add them together?

and if the stock split after i purchased all of the shares, will the cost basis be 100 shares @ $10/share and 40 shares @ $20/share?
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Corrected message, please ignore previous post....


ok, i need to know if i've figured this out:

for individual securities, if i bought xyz company shares twice in one year,

50 shares @ $20/share = 1000, c.b= 20/share
20 shares @ $40/share = $800, c.b=40/share

and sold all of the shares at the same time at $50/share (in the same year as purchased), since you cannot use an average cost basis for stocks, do i list the final transaction as separate
transactions on my tax forms?

ie 50 shares sold at $50/share, gain of $1500 and
20 shares sold at $50/share, gain of $200?

or do i just calculate the two different gains and then add them together?

and if the stock split after i purchased all of the shares, will the cost basis be 100 shares @ $10/share and 40 shares @ $20/share?

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This is an easy one, so I might as well answer. If the sale and purchases are all in the same year, any gains must be short term. So, on Form 1040, Schedule D, Line 1, column (b), you put "Various." Your total cost goes in column (e).

The reason it's easy is that you are selling all the shares at once, and on a short term basis.

You would split out the gains if some were short term and some long term, but they aren't.
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<< and if the stock split after i purchased all of the shares, will the cost basis be 100 shares @ $10/share and 40 shares @ $20/share? >>

You already got the right answer to your Schedule D question. The answer to this question is "yes," assuming 2 for 1 splits.

Phil Marti
Tax Preparer
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