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<< I'm getting ready to sell some stock and am trying to decide which lots to specify. I see 3 options:
1) If I include shares purchased for more than the current price (this is a loss), I don't think the tax break is worth taking a loss for.
2) Or, if I sell shares purchased at about the same as the current price, I just break even, which doesn't make sense because I bought them to make money not just break even.
3) But, if I sell shares purchased below the current price, I have to pay the capital gains.

My instinct says to sell the shares that I bought at the price closest to the current price. >>

That's probably because your instinct favors the status quo (the emotional equivalent of Newton's first law.)

You have to expand your horizon to include your plans and goals.

How long do you plan to keep a possition in this stock? "Until I die" favors keeping the cheapest shares because your heirs will get a stepped-up basis of FMV at your death.

What other sales do you contemplate in 2000? If you're going to have some short-term gains, losses to offset are always nice, indicating a sale of the highest price shares.

These are just two things off the top of my head. I'm sure there are others.

Phil Marti
Tax Preparer
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