Another cost basis question

[disneysteve]

Let's say I bought 700 shares of stock in several lots with an average cost basis of $9.47.
I then sold 300 shares for an average price of $14.65.
I report my cost basis for the sold shares as being $9.47.

Does the profit I made on the sale alter the cost basis on the 400 shares I still own or do they continue to have a cost basis of $9.47?

[Like2Plan]

Let's say I bought 700 shares of stock in several lots with an average cost basis of $9.47.
I then sold 300 shares for an average price of $14.65.
I report my cost basis for the sold shares as being $9.47.

Does the profit I made on the sale alter the cost basis on the 400 shares I still own or do they continue to have a cost basis of $9.47?

Just wondering if this question pertains to individual stocks or a mutual fund? (Because you can't use average cost for individual securities)

"Average Cost
Using the average cost, cost basis is calculated based on the average price paid for all shares held, regardless of holding period. Gains or losses are defined as short-term or long-term based on the assumption that the oldest shares are sold first, even though the average cost is the same for all shares. This method of calculating cost basis is permitted for mutual funds only and cannot be used to calculate cost basis for individual securities such as stocks and bonds."
http://personal.fidelity.com/webxpre...st_basis.shtml


https://www.irs.gov/faqs/capital-gai...ibutions-etc-1

https://www.irs.gov/forms-pubs/about-publication-550

https://www.irs.gov/publications/p55...blink100010394

[disneysteve]

Just wondering if this question pertains to individual stocks or a mutual fund? (Because you can't use average cost for individual securities)

Ah. The question is about an individual stock.

So I need to look at each lot separately and assume the ones I sold were the first ones I bought (FIFO) and the ones I am still holding are the later ones purchased.

Thankfully I have great records so I have all of that data at my fingertips. The brokerages didn't report that info years ago, plus our broker changed hands 4 times since we opened our accounts so a lot of historic data was lost in the process (Olde to H&R to Scottrade to TD Ameritrade).

[LivingAlmostLarge]

Ah. The question is about an individual stock.

So I need to look at each lot separately and assume the ones I sold were the first ones I bought (FIFO) and the ones I am still holding are the later ones purchased.

Thankfully I have great records so I have all of that data at my fingertips. The brokerages didn't report that info years ago, plus our broker changed hands 4 times since we opened our accounts so a lot of historic data was lost in the process (Olde to H&R to Scottrade to TD Ameritrade).

You don't have to FIFO you can sell specific lots and do it that way.

[disneysteve]

You don't have to FIFO you can sell specific lots and do it that way.

Well, I can't in this case since some of the shares were already sold, but yes, starting from scratch I could do that.