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Strategies & Market Trends : Income Taxes and Record Keeping ( tax ) -- Ignore unavailable to you. Want to Upgrade?

To: lavalamp who wrote (162)	11/2/1997 3:52:00 PM
From: Zeuspaul	Read Replies (1) \| Respond to of 5810

lavalamp, did Schwab indicate that you need consistancy? Can we randomly pick and choose the lot matches? Can we use one system with one brokerage account and another system in another brokerage account for the same stock symbol? I would also like to see something from the IRS. The tax consequences could be significant if the IRS sees things differently.

To: lavalamp who wrote (162)	11/3/1997 3:15:00 AM
From: Colin Cody	Read Replies (1) \| Respond to 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