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I have been looking at the 1040 Schedule D forms looking for info. for how to calculate cost basis and I can't seem to find what I am looking for. My situation:

I purchased shares of company at several different points in time within the past year. I have lost money on all three purchases. However, I have sold only a percentage of these shares and still own 50% of the shares.

My question...to calculate my losses (which I would like to maximize for tax purposes), can I first "sell" the shares that cost the most per share - independant of the when date/sequence when I purchased these shares. Or, do I have to use a FIFO approach to calculate my cost per share.

Thanks in advance.

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I purchased shares of company at several different points in time within the past year. I have lost money on all three purchases. However, I have sold only a percentage of these shares and still own 50% of the shares.

My question...to calculate my losses (which I would like to maximize for tax purposes), can I first "sell" the shares that cost the most per share - independant of the when date/sequence when I purchased these shares. Or, do I have to use a FIFO approach to calculate my cost per share.


Lose those quotation marks and the answer is "yes." Now the details.

You're stuck with FIFO for the shares you already sold since you didn't identify them at the time of sale. You may specify the shares you sell in the future. You can read about specific identification in the FAQ over there------------------------------->

Phil
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I could be wrong, but my recollection is that you have the option of selecting either FIFO or average cost basis. I think you may make the selection per security.

Puss
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I could be wrong, but my recollection is that you have the option of selecting either FIFO or average cost basis.

Bzzt! Average cost works only with mutual funds. With individual stocks, which is what OP was asking about, there are only two choices: FIFO or specific lot identification. And if you don't make such an identification at the time of the sale, there's only one choice, and that's FIFO.

Lorenzo
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Average cost works only with mutual funds.

Oops. Got my wires cross there. Thanks for correcting me.

Puss
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