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Financial Planning / Tax Strategies


Subject:  Re: Reporting Date:  11/3/2000  2:19 PM
Author:  ptheland Number:  41457 of 130451

I am ready to sell a security which I bought with about 30 monthly purchases (like drip, except it was not a dividend reinvested, but periodic principal payments). First 25 purchases, all over a year old, would yield a gain. Last five, 2 of which are less than a year, will be sold at a loss. To complicate the matter, most purchases involve fractional shares. Now, what is the most efficient way to report this on my tax return?

It is permissible to summarize the transactions by reporting just the total of the long-term and short-term items. For the purchase date you can use "various". In your case, for the long-term items it is not necessary to separate the gain lots from the loss lots. (The first thing schedule D will do is net them together anyway.)

So total up your basis for the long-term lots and report that on one line. Then total your basis for the short-term lots, again reporting on a single line. Allocate the selling price across the two totals, find the net gain or loss for the two lines, and you're done.

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