The LIFO method is one that you have to elect affirmatively with your broker. The main benefit of the LIFO method is that the shares that you've owned for the shortest period of time tend to be the ones that have the smallest taxable gain, and so you can make a sale without incurring a large tax bill. However, because the LIFO method involves the shares that you bought most recently, any tax that does result will sometimes be taxed at higher short-term capital gains rates.
The question I could not find an answer to is "does the use of LIFO apply for the whole year or to each separate sale". if it does, then using LIFO the last shares purchased would be used against the first sale during the year even if the purchase was after the sale.
a better way is to use the specific identification method. you select the lot that is to be sold and you inform your broker that you want to sell x shares of stock y you bought on xx/xx/xxxx. this should be on the confirm. thus you can override any default method you've chosen.
