accounting for stock trades
Fri, 03 Jan 2003 09:32:29 -0500
In a message dated: Fri, 03 Jan 2003 00:31:08 EST
Ed Warnicke said:
>This troubles me. I expect most people, most of the time, to use a FIFO
>method for handling flow of commodities into and out of their account
Most maybe, but definitely not all. I regularly sell shares of commodities
acquired more recently than those I've held for a long time. For
example, if on Jan 1 I buy some stock for $30USD and later purchase
more of that stock in June at $60USD I may, at the end of the year
choose to sell shares in the second lot. Maybe by December this
stock has fallen to $55USD. If I sell shares from the first lot I've
realized a $25USD/share capital gain, but if I sell from the second lot,
I've realized a $5USD/share capital loss. The affect this has on my taxes
should be obvious.
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