The average cost of the covered shares is considerable higher that the uncovered shares. The fund company split the proceeds of the transaction with the result that TurboTax computes the transaction as two sales, with a gain that is considerably higher than it would be if I simply used the average cost per share of all of the shares on the date of the transaction.
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The only "category" that should make a difference in calculating gain is whether the transactions were short-term or long-term. The overall gain (short-term plus long-term) should be the same whether you use average cost or specific lots, as long as your average cost calculation is correct.
If the sale of both lots (covered and non-covered) had the same character (i.e long-term or short-term), you can use the average cost for all the shares to calculate your gain.
Otherwise, you would have to calculate the average cost of the short-term holdings, whether covered or non-covered, and the average cost of the long-term holdings, whether covered or non-covered.
The only "category" that should make a difference in calculating gain is whether the transactions were short-term or long-term. The overall gain (short-term plus long-term) should be the same whether you use average cost or specific lots, as long as your average cost calculation is correct.
If the sale of both lots (covered and non-covered) had the same character (i.e long-term or short-term), you can use the average cost for all the shares to calculate your gain.
Otherwise, you would have to calculate the average cost of the short-term holdings, whether covered or non-covered, and the average cost of the long-term holdings, whether covered or non-covered.
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