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Author: DowDanny Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 123522  
Subject: Holding Period for "avg cost" shares Date: 12/22/1998 5:08 PM
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Howdy Tax-Mavens,

Don't spank me for asking a question probably addressed in the FAQ or even our favorite IRS pubs, but I'm feeling a little lazy and figured I'd toss you guys a soft-ball.

here goes:

IF I am selling a mutual fund, and I elect to assign cost basis on the "average cost per share" method... how to do I determine holding period ? If I have recently purchased shares, do I have to allocate the sale (short term/ long term) in proportion to the amount (pre-sale) shares held short-term and long-term.

That method would make sense, since it corresponds more or less to the method used to determine cost-basis, but it will be slightly complicated.

Thanks for answering.

- DD

PS: Of course, I always use "first in / first out", especially after one mutual fund company (ticker: BEN) REFUSED to forward any paper work for "specific share identification" on a partial redemption. "That's between you and the IRS, nothing to do with us" said both phone agent and next-available-supervisor.

I know that they REALLY do have an obligation to allow for such identification, but without IRS reg number in hand, I just said "thank you" and took the long term loss, stead of the short term.

Cheers !
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