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papaduke101: "Question: Can I sell the specific zz and yy whole shares from the stock dividends in order to restore my original cost basis?"

Not a tax expert, but NO.

When you sell specific zz and yy whole shares, the basis allocated to those share is used for purposes fo calculating gains(or losses) on the shares you sold. You do not have the option of choosing a "zero" basis and "re-allocating" the unused basis to the remaining shares.

Also, this question makes no sense to me. When you sell specific zz and yy whole shares, trying to use a "zero basis (which you cannot do) woudl increase gains or minimize losses earlier. Accelerating income is not often a good idea (though there can be exceptions for specific sets of circumstances).

Regards, JAFO
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