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I have bought shares of Verizon in a taxable brokerage account from time to time.

Now I have sold 100 shares of it. I have all the confirmation slips, but do I match them FIFO or LIFO to satisfy the IRS? Or does the IRS use some other rule. Verizon is a corporation, not a mutual fund (in case you are in doubt). Since I sold on-line using my broker's web site, I have never specified what lot to sell.

And if (not the case this time) the amount sold matches, say, part of a lot, or part of two lots, what lot(s) would I specify?
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Now I have sold 100 shares of it. I have all the confirmation slips, but do I match them FIFO or LIFO to satisfy the IRS? ... Since I sold on-line using my broker's web site, I have never specified what lot to sell.

Since you did not specify a lot to sell at the time you sold the stock, you sold the oldest shares.

--Peter
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Thank you.
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ptheland,

JeanDavid wrote, Now I have sold 100 shares of it. I have all the confirmation slips, but do I match them FIFO or LIFO to satisfy the IRS? ... Since I sold on-line using my broker's web site, I have never specified what lot to sell.

To which you replied, Since you did not specify a lot to sell at the time you sold the stock, you sold the oldest shares.

From what I recall, TD Ameritrade has an option to change the default order for the disposal of shares. In fact I don't recall being able to specify individual lots at TDA - only select from a handful of available ordering rules.

As you know cost basis reporting was not always required. However I'd had my TDA account by way of Datek and Ameritrade. And from what I recall, they all tracked cost basis at least internally using a third party software called GainsKeeper. So even if the shares sold were acquired before 2011 when cost basis reporting became mandatory, I'm pretty certain it's possible to get the cost basis from the TDA website ... unless perhaps the shares were acquired through a different broker and transferred over before 2011.

- Joel
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From what I recall, TD Ameritrade has an option to change the default order for the disposal of shares. In fact I don't recall being able to specify individual lots at TDA - only select from a handful of available ordering rules.

There are plenty of different options available at different brokers. But that's kind of irrelevant to the question.

For stocks (other than Regulated Investment Companies, AKA mutual funds), the IRS allows two ways to calculate the basis of stocks sold when you do not sell all of the shares of a particular company. There is specific identification and there is FIFO.

The default is FIFO. To use specific identification, you must tell your broker which shares to sell at the time you sell the shares.

The various things you mention are all ways that different brokers can accommodate your specific identification of shares to sell.

JeanDavid said that he did not identify which shares to sell. So he must use the default of FIFO.

--Peter
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I agree that FIFO is the default. At Fidelity that message is printed on ever brokerage statement recording a stock sale.

But you do have the opportunity to specify the sale of any group of shares you wish. Its news to me that the IRS has limits. Shares of stock are discrete entities. You may specify any of them as the ones sold. And each has its own cost basis. Hence, tax considerations are often the decider in a taxable account.
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But you do have the opportunity to specify the sale of any group of shares you wish. Its news to me that the IRS has limits. Shares of stock are discrete entities. You may specify any of them as the ones sold. And each has its own cost basis. Hence, tax considerations are often the decider in a taxable account.

It's not that the IRS 'has limits'. It's that the IRS requires that if you want to sell specific shares, you identify which shares those are to your broker at the time you are selling them. You are not allowed to decide at a later time. If you don't identify the shares, then the default is FIFO.

AJ
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AJ, just to clarify, at TDA I can specify the shares to be sold at the time I place an order which gets executed when the shares are sold, but I can then change the shares specified before settlement occurs, two days later.
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