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Once you elect a method for a given mutual fund, you must continue to use that method for future sales.

Sorry, but that's wrong. It's true that once you use one of the two average cost methods, you have to stick with that method from then on for that fund. But you can start out using actual cost basis, either FIFO or specific identification, and perhaps use either of those methods several times. You can then switch to one of the average cost methods - but once you've done that, you have to stay with it.

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