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<< If I sell some shares of a stock that I purchased at different times and/or at different prices, how do I handle that in terms of gains?

Which price and which date do I use? >>

Since you don't know the answer to the question, you sold your oldest shares first. (This is only an issue if you didn't sell all the shares you owned.)

1. Separate the shares sold into two groups: those you held 1 year or less (short-term), and those you held more than 1 year (long-term).

2. For each group, compute the number of shares sold and the total basis for each group.

3. Allocate your sale proceeds between the two groups, basing the allocation on the number of shares in each group.

4. You'll have an entry on line 1 of Schedule D for the short-term sale and an entry on line 8 for the long-term sale. (You may just have one or the other, if all were short- or long-term.) Use "various" as the purchase date.

If you need more information on any of the terms I used, type it into the search box and hang on.

Phil Marti
Tax Preparer
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