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I own over 1,000 shares of a specific stock. The shares were purchased on 4 different dates at 4 different prices.

Now I wish to sell a portion of these shares. How do calculate the gain? What is acceptable, LIFO or FIFO? Or can I initially pick the highest price, as long as I am consistent as I sell more in the future.

You have two choices for calculating the gain or loss on stocks. (Mutual funds are a bit different.) You can use either the FIFO method or specific identification. Specific identification will give you the smallest gain (or largest loss). To use specific identification, you'll need to instruct your broker to sell shares from a particular lot. Then get a timely advice from your broker or keep adequate records (doing both is best) and you're set.

There's more information in the FAQ's in the section for investing. It's a good place to get some more "specifics" on this issue.

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