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OK, I looked in the FAQ and couldn't find this. Maybe I'm blind or something. :-)

Here's the scenario I'm looking at: Bought 3000 shares of X on Dec 21st, 2000 shares on Jan 5th, 750 shares on Jan 15th. Sold 4500 shares on March 3rd. When entering this in TurboTax, how do I calculate my cost basis? I got my 1099 and my monthly statements, but I'm not sure how to split this up; do I average the cost basis, and if so, what do I do with the date? AFAIK, I can only enter one date for the purchase.. should I make _two_ sales, one for 3000, and one for 1500, and reference back to the first two purchases of the stock for the cost basis? I'm confused. I got some 80 trades on my 1099 so I better get cracking...

-Crow (don't wanna be audited)
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By default, you are First In, First Out. You enter the date acquired as "various" on Line 1 of Schedule D. Your costs are for the first 3000 + 1500 shares.

Other reporting methods are possible, and TMFTaxes has discussed them in his Tax Guide. But if you didn't set up an arrangement with your broker, FIFO is it.
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By default, you are First In, First Out. You enter the date acquired as "various" on Line 1 of Schedule D. Your costs are for the first 3000 + 1500 shares.


Gotcha -- thanks. I gather that if I do this in TurboTax, I should enter it as a ``forced short' assuming the period is less than a year? (Otherwise it'll require a single date.)

So, one last thing.. If I have a sale of 5000 shares, where 2500 were bought within a year, and 2500, say, two years ago -- do I split it into two sales?


-Crow
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So, one last thing.. If I have a sale of 5000 shares, where 2500 were bought
within a year, and 2500, say, two years ago -- do I split it into two sales?


While we're waiting for one of the "tax pros" to answer your question, I'll just toss in my 2c and say that I think you want to show it as two separate sales, so that you get the benefit of the long-term cap gains rate for those shares you held longer than a year.

That's the way I presented a similar sale on last year's return and my tax accountant didn't holler at me, so I guess it was correct.


Jeanie
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Crow asks (when he sells some shares of a single stock, of which some are short term, some long term): do I split it into two sales?

Clearly, yes. (But remember, I'm not a lawyer or a CPA and I don't even play one on TV.) The tax treatments are likely different. They might net out the same, but there's no way to know without specifics, which of course will vary with the transaction and your other investments. The only question I'd have is how to divide the broker's commission. For even numbers of shares, I'd split it evenly.
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<< Gotcha -- thanks. I gather that if I do this in TurboTax, I should enter it as a ``forced short' assuming the period is less than a year? (Otherwise it'll require a single date.) >>

Try typing a "v" in the purchase date and see what it does. I don't know what a "forced short" is in TT parlance, but it is not what you have. If all else fails, you could try TT help.

<< So, one last thing.. If I have a sale of 5000 shares, where 2500 were bought within a year, and 2500, say, two years ago -- do I split it into two sales? >>

Yes. Don't forget to apportion your sale commission/fees between the two lots.

Phil Marti
Tax Preparer
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I had the same situation and I would do two different sales, one for 3000 and one for 1500, and reference back to the first two purchases of the stock for the cost basis. This is exactly what I did and what you suggested. To be sure I think turbo tax has online help.
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<< Gotcha -- thanks. I gather that if I do this in TurboTax, I should enter it as a ``forced short' assuming the period is less than a year? (Otherwise it'll require a single date.) >>

Try typing a "v" in the purchase date and see what it does. I don't know what a "forced short" is in TT parlance, but it is not what you have. If all else fails, you could try TT help.


"forced short" just means you are forcing turbotax to use short term cap gains.
If you split the sale into 2 parts, the part for holdings less than a year should be short term. So, if TT doesn't correctly enter that for you, then you should force it to be short. However, after you split the transaction, you will only have the problem of needing to force the short cap gains if the purchase date was still "various" for the short term gains portion of the transaction.

Good luck. that stuff is a pain.
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It's probably not as straightforward as splitting the transaction. There's a good explanation of netting out long- and short-term gains and losses in post #24110.

c4
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doesn't matter as long as you sold them together ( one sale ), and they were all either long term or short term. ------ if the sales are both long, and short term, then you figure seperate, proceeds,--- long term,----- and proceeds, short term. --YOU HAVE TO GIVE THEM FIGURES ASKED FOR ON THE FORM, OTHERWISE THEY RETURN AND MUST BE CORRECTEED AND SENT IN AGAIN.-i'm hoping for some changes to be made at IRS, so you can just copy the year end report you get from your broker and send it in. right now my wife does it long hand and it certainly is a pain in the butt and it requires much writing and checking. this may not help you, but i don't know how to use the software for taxes. it seems like more work, (typing and longhand.)-- i had about 200 trades in 99. we're just about done with our return.
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