Stock cost basis

[Questionguy101]

Taxpayer bought 100 shars of XYZ on 10/31/06 @ $5,000

Then he bought another 100 shares of XYZ on 11/15/06 @ $7,000

Then he sold 100 shares of XYZ on 12/30/06 @ $9,000

Does he have the choice to decide whether he has sold the 100 shares bought on 10/31/06 or the other 100 shares bought on 11/15/06?

[Snaggletooth]

Yes he does

Last time I researched this, I found out the IRS allows any reasonable valuation method for the cost of securities. I use the moving average for my customers whenever possible.

Acceptable methods would be:

1)Specific identification
2)FIFO first-in, first-out
3)Moving average
4)LIFO last-in, first-out
5)NINO, never-in, never out.

[Scratch #5 above, just a chuckle]

HOWEVER, the election MUST be consistent from security-to-security, and
from year-to-year. Also, in absence of any record-keeping, the IRS will assign
the FIFO method.

Regards, Ron J.

[sea-tax]

I will usually use the FIFO method . It seems to work for me.

[veritas]

Of course

if Sea-Tax was their advisor they would have identified specific shares and reduced the tax liability by selling the most expensive first.

[sea-tax]

if Sea-Tax was their advisor they would have identified specific shares and reduced the tax liability by selling the most expensive first.

Not sure how to respond to that one my southern neighbor.

But tax season is going smashingly still, another 2.5 mil in assests acuqired just last week.
Seems as though people are dumping real estate and moving back into the market. Hurray!