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Author: lorenzo2 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121095  
Subject: Re: Dividend Reinvestment - A Tax Nightmare? Date: 7/6/2008 8:11 PM
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The usual thing is last ink first out unless you tell them otherwise in writing

No, the default is first in, first out (FIFO). But otherwise, brucedoe is right: it's not all that hard if you keep accurate records, and that's dead simple to do with a spreadsheet. In that case, it shouldn't take you more than a few minutes to calculate the cost basis of any sale.

(And as others have noted, you can't use an average cost basis - that's only an option with mutual funds. With individual stocks, you have to work out just which shares are being sold, and add up corresponding purchase prices. That's where the spreadsheet comes in. Or, if you wish, a pocket calculator. Either way is easy enough if you have good records.)

Lorenzo
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