Tax Lots

[AccentricInv]

It's nearing the end of the year, and time to think about taxes... curious, which tax lot methods members use / think are best?

 

Interactive gives the options of FIFO, LIFO, Highest Cost, Maximize LT Gain, Maximize LT Loss, Maximize ST Gain, Maximize ST Loss.  Any thoughts on which you'd choose and why?

[rb]

In Canada you have to use weighted average cost.

[rkbabang]

I've always used FIFO.  I didn't realize you had a choice.  I've always thought the IRS required FIFO.

 

[TwoCitiesCapital]

I've always used FIFO.  I didn't realize you had a choice.  I've always thought the IRS required FIFO.

 

It's my understanding you can direct your broker/accountant of which to use. Some may even let you choose to customize at the position level instead of the account level. Just got to make sure it's all well documented and correct in the event you get audited.

[Jurgis]

I've always used FIFO.  I didn't realize you had a choice.  I've always thought the IRS required FIFO.

 

It's my understanding you can direct your broker/accountant of which to use. Some may even let you choose to customize at the position level instead of the account level. Just got to make sure it's all well documented and correct in the event you get audited.

 

What TwoCitiesCapital said. I've done it @position level in the past. I'm not an accountant though and I haven't been audited so far, so FWIW and all that.

[rkbabang]

I've always used FIFO.  I didn't realize you had a choice.  I've always thought the IRS required FIFO.

 

It's my understanding you can direct your broker/accountant of which to use. Some may even let you choose to customize at the position level instead of the account level. Just got to make sure it's all well documented and correct in the event you get audited.

 

What TwoCitiesCapital said. I've done it @position level in the past. I'm not an accountant though and I haven't been audited so far, so FWIW and all that.

 

I do my own taxes, so I'll stick to FIFO.  Keep it simple.

 

[indirect]

I always sell my highest cost shares first. Schwab, etrade and IB lets you pick your lots for selling.