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I'd like to give my daughter some shares of my Index Fund. Are gifts subject to FIFO rules, or can I specify what I want to gift? Since I'd like to sell some of them from my individual account, and repurchase them in my IRA, I'd like to gift my most recent purchases and sell off the oldest so as to take advantage of the lesser tax liability. Any thoughts?

You can specifiy which shares you're giving her. Make sure you give her documentation of your basis and holding period, both of which transfer with the gift. If the current value is less than the basis, she needs to retain that information also.

Now, assuming that the index fund has gone up over time, are you sure your stated plan is the way you want to go? It seems to me like you would be minimizing your tax liability by selling the shares with the highest basis, which wouldn't be the oldest ones.

Phil Marti
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