L K Williams <lanny[at]loxinfo.co.th> wrote:

- quote -

Not quite. Once you start using average cost, you must
continue that method until you sell all the shares. But
if you first use FIFO or specific shares, you can still
switch to average later on -- you'd have to compute the
average cost of the specific shares that remained.

--
Barry Margolin, barmar[at]alum.mit.edu
Arlington, MA
*** PLEASE don't copy me on replies, I'll read them in the group ***

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- quote -

The average basis tends to be the easiest to compute,
especially if you are trading and re-investing over decades.

These days a good mutual fund company will compute these
numbers for you. The basis is NOT on the 1099 they send to
you and the IRS.

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3tki[at]aol.com wrote:

- quote -

It is too late to identify which "Lots" you sold. To use
the specific identification method, you must notify the
broker, etc. in writing, prior to execution of your order.
You cannot pick and choose after the fact.

You have two alternative methods available: FIFO (First-In,
First-Out) or average cost. Which method you choose for
sales this year must be used for all future sales of the
same fund until you no longer own shares in that fund.

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans

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- quote -

If you already sold the shares, it's too late to designate
specific lots. You had to have specified which shares you were
selling at the time of the sale (i.e. when you told the fund to
sell them), and the fund had to have given you a written
confirmation of your specification.

If you did not identify the specific shares at the time of the
sale, then you sold the oldest 1300 shares that you owned. Since
this is your first sale of this fund, you still have a choice of
two methods for determining your basis. You can use either the
average basis or the actual cost of those 1300 oldest shares. If
you use average basis, then you must continue to use average
basis for all subsequent sales of this fund.

If you had specified the shares to be sold at the time of the
sale, you could have included shares purchased with reinvested
dividends or capital gains.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

We sold off 1300 shares of a mutual fund for the first time
this year. As I try to identify which "Lots" we sold, I
want to sell those lots with the least gain. Can I include
Lots of Reinvested Dividends or Reinvested Gains as some of
the lots I sold?

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >