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<<The lot designation of shares sold on trade confirmations is no longer required by the Internal Revenue Service. You may use the e.Schwab software to designate the shares sold, by matching tax lots for the position, after the trade executes.>>

I never knew that the lot designation was EVER required by IRS. Using the specific ID method is something established by the IRS in regulation. Regulations that the taxpayer must follow in order to secure the appropriate method. So I'm not really sure what they are driving at with this statement.

Nevertheless, I don't believe that it is Schwab's mission to protect the taxpayer on this issue. They can't be responsible for taxpayers with ugly records or no grasp of the law. Their system allows for matching of tax lots for the convenience of the customer (I would imagine). If the lots are matched, and other requirements are met (as outlined in the Tax Court case), all should be OK.

TMF Taxes
Roy
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