Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
New Member
posted Jun 6, 2019 10:32:40 AM

Are Long Term Capital Gains Taxes based on the first holding date of purchase even if other purchases were made throughout the year?

I'm going to use an easy example to get at my question. Let's say I purchased $100 of a stock on January 1, 2016 (not in a tax-sheltered account, in a regular brokerage account). I used the dollar-cost averaging approach so I purchased another $100 of that same stock in February, March, April...all the way to December 1. 

By December 1 I bought $1200 of this stock. Due to returns, the value has increased to $1500. Now I want to sell it, but I want to wait until it will be a long-term capital gains tax, not a short-term capital gains tax. 

If I sold total $1500 on January 2, 2017 would that be subject to long-term capital gains for the entire $1500? Or would it be long-term capital gains on the first $100 I bought on January 1 (plus whatever return I made on that $100) and short-term capital gains on the remaining $1100 (plus whatever return I made on that $1100) that I bought in less than one year?

Thank you in advance for your help on this!

0 3 2465
1 Best answer
Level 13
Jun 6, 2019 10:32:45 AM

The holding period is determined on a lot-by-lot basis.  In your example only the first purchase would be long term.

Tom Young

3 Replies
Level 15
Jun 6, 2019 10:32:42 AM

If you purchased after 2011, your broker will break it out for you. Just report what is on your consolidated 1099-B.

Level 15
Jun 6, 2019 10:32:44 AM

you can sell the part bought more than a year ago. That would entail more commissions to unload it all. FIFO is the default accounting.

Level 13
Jun 6, 2019 10:32:45 AM

The holding period is determined on a lot-by-lot basis.  In your example only the first purchase would be long term.

Tom Young