You have two purchases and two items in inventory. Here is an example of how it works.
- The first purchase of 1.0 unit of investment A is dated 01/01/2023 with a cost basis of $100.
- The second purchase of 1.0 unit of investment A is dated 02/01/2023 with a cost basis of $200.
- If you sell 1.5 units of investment A on 01/15/2024, you would report the sale of the first unit as a long term gain or loss because you held the investment for at least one year and one day.
- You would report the .5 unit as a short term gain or loss because you held the investment for less than one year.
- You are left with .5 unit of investment A in inventory with a cost basis of $100.
This example assumes that you are assigning inventory and costs under the FIFO or first in, first out method. See also here.
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