Income Taxes and Record Keeping ( tax ) Message Board

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Strategies & Market Trends : Income Taxes and Record Keeping ( tax )

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To: lavalamp who wrote (162)	11/3/1997 3:15:00 AM
From: Colin Cody	Read Replies (1) of 5810

Reg 1.1012-1(c) says if the stock sold is "adequately identified" as a lot purchased earlier, then this can be matched to the stock sold. Otherwise the first-in first-out method is used. . Adequate Identification: (1) If you physically deliver specific stock certificates to the broker to be sold, and these are clearly identified as the one YOU WANT TO BE SOLD. . (2) Indentification by brokerage on the sales confirmation, even if the broker sells other stock certificaters (for instance, in error). OR in a reasonable time thereafter the broker the broker indicates in a written document the stock identified as sold.again even if the broker sells other stock certificaters (for instance, in error). . (3) special rules for Trustees, Executors and Administrators, which have a little more flexibility. . There is an "average cost basis" which Reg 1.1012-1(e) says is limited to "Certain Regulated Investment Company Stock." (Mutual Funds) . Joseph Gann, Inc v Comm was a case where the taxpayer used the average cost basis, for stocks sold and the IRS forced them to go to First-in First-out. . Colin

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