Questions: Assuming I bought ABC stocks at 2 different dates, say, 1000@ $5 on 1/20/2024 and another 1000@ $10 on 3/20/2024. If I sell 1000 shares later with gain @ $15. I know I can pick either one (purchase date) to sell at the sale time.
Can I change the purchase date I bought before 12/31/2024 or change the date before filing my tax return in 2025 to make the right tax harvesting?
Thanks
@SLYKTAX , not really. You have to declare/ instruct your broker as to which batch and how many you are selling and then have to use this LIFO or FIFO regime on your return. Else you will be violating perjury jurat.
Not sure you answer my question, I asked:
Can I change from FIFO to LIFO or vise vera before filing the year tax return that is on April the following year.
@SLYKTAX sorry for the confusion. What I meant is that when you sell the stock(s) you will have to tell the broker which batch you are selling from. You can also choose how many from each block if you want to do that. Once that is done the basis of the stocks is frozen. Thus when you file your return, you recognize the gain/loss and the holding period, based on what you sold through the broker.
Does this make sense ?
Thanks. I knew about that.
As you know there is still months away to Dec 31. Choosing another basic maybe better than I had chosen at the time I sold a security. It would be even better if I can make changes to the basic before I file my tax return next year.
I thought someone here would know instead of asking the custodian of my security.
What I really want to know is Can I change from one BASIC to another at the end of the year or before tax filing which is the following year?
@SLYKTAX , sorry that I provided info that you already you knew -- please forgive.
You wrote --> " Choosing another basic maybe better than I had chosen at the time I sold a security"
Thus you have chosen a basis -- you would be at risk of perjury if you now claim a different basis than what you told your broker at the time of the transaction . Please consider contacting your broker as to which lot he/she sold the shares from.
@SLYKTAX let me try this (and I appreciate this was a post from two weeks ago)
as stated, when you sell a stock, you must declare then and there which lot you are selling. Doesn't matter if FIFO, LIFO or a specific lot, but you must declare then and there and there is no changing that lot later.
For future sales, you can always change the methodology of the remaining lots.
Frankly, to me, the lot to sell is the one with the highest cost basis as it reduces the capital gains tax / increases the loss harvesting. Simply whatever lot has the highest cost per share is the one to sell.