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Financial Planning / Tax Strategies


Subject:  Re: Capital gains question Date:  2/3/2000  9:29 PM
Author:  JAFO31 Number:  27088 of 133282

<<<<e.g., say I buy 10 shares of ABC on 1/1 for $45, and then buy another 30 shares on 1/25 for $25.
On 2/12, the price has raised to $40 and I decide
to sell 20 shares at that price. What dollar amount
would I pay short-term gains on?>>>>

Wiggy4: "Your cost basis for shares sold will be on a FIFO basis. The first shares you bought will be sold first. Of the 20 shares sold, the first ten have a cost basis of 45 and the second 10 have a cost basis of 25. All of the gains are short-term. You held nothing for more than one year.

STCG rate is 28%, and LTCG rate is 20%. There are exceptions for individuals whose income is all in the 15% bracket... Don't remember the exact provision.

For additional info, check the IRS website at "

Good post, but the hypothetical raises wash sale issues. Bought on 1/1 for 45, sold on 2/12 for 40, but had disqualifying purchase on 1/25 at 25, which is less than 30 days prior to sale.

Regards, JAFO

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