accounting for stock trades

plussier@mindspring.com plussier@mindspring.com
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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Seeya,
Paul
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