kamlet[at]panix.com (Arthur Kamlet) writes:

- quote -

Not quite true. If you use "avg cost - dual category"
you could in theory make a specific ID of which category
you were selling from. Good luck actually doing that,
though. :-) And if you could make the specific ID of that,
you might as well use *real* specific ID and not do
averaging at all.

See: http://www.fairmark.com/mutual/double.htm

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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"rick++" <rick303[at]hotmail.com> wrote:

- quote -

Not quite. Once you use averaging you have to stick with that. But if
you start out using FIFO or specific shares, you can later switch to
averaging. The average would be computed from the basis of the shares
that you didn't previously sell.

--
Barry Margolin, barmar[at]alum.mit.edu
Arlington, MA

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wrote:

- quote -

You can use Specific Identification to determine cost as
many times as you wish for a fund. And you can later
switch to an averaging method.

But once you use either Type I or Type II averaging, you
must stick with it while holding the fund. With either
averaging method, you are deemed to have sold the oldest
shares first.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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<< General Disclaimer: > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << It cannot be used by any taxpayer for the purpose of > << avoiding penalties that may be imposed on the taxpayer. > << ================================================== ===== >
D.D. Palmer wrote:

- quote -

You have different options (including averaging) for
calculating your basis assuming that you have never sold any
mutual fund shares in that fund. It is all explained in IRS
Pub 564, Mutual Funds.

http://www.irs.gov/publications/p564/index.html
http://www.irs.gov/pub/irs-pdf/p564.pdf

--
Alan
http://taxtopics.net

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You can choose specified shares or averaging,
but once you use one method you have to stick
with it until you end the investment.

The average method requires tracking two numbers:
total purchase price and total shares, while the
share method requires keeping track of every number.
Over the decades you can have hundreds of
automatic re-investments.

Furthermore, many fund companies automatically
calculate the average method for you.

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"D.D. Palmer" <ddpalmer[at]hotmail.com> writes:

- quote -

Just the opposite. Absent a valid specific identification,
you are deemed by law to be selling the *oldest* shares
first.

- quote -

Yes. Though once you switch to an avg cost method for a
fund, you have to keep using it for that fund until your
position in the fund is liquidated.

See http://www.fairmark.com/mutual/partic.htm for a whole
bunch of stuff on basis of mutual fund shares.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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I am planning to sell some shares of a mutual fund that I've
had for 4 years with the dividends reinvesting. I'll
probably only sell about 5% of my total holdings. When I
sell, must I consider the first shares sold as "short term
gain" shares to equal the shares bought with dividends
reinvested during the past 12 months? Or is there some
accepted way to average the cost of the whole thing. I used
to know this but forgot. Thanks for your help.

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