Suppose I own two shares of company XXXX, one acquired for $3,000 in January 2020, and one acquired for $9,000 in July 2020. In December 2020 I sell one share of XXXX for $6,000. In February 2021 I receive a 1099-B from my broker with the transaction recorded as follows:
1a-Description of property: 1 sh. XXXX
1b-Date acquired: January 2020
1c-Date sold: December 2020
1d-Proceeds: $6,000
1e-Cost basis: $3,000
Realized Gain or (Loss): $3,000
Can I change my cost-basis retroactively to elect to sell the share acquired for $9,000 in July 2020? This would allow me to offset ordinary income with net capital losses of $3,000 (instead of reporting a $3,000 short-term capital gain).
(Note: I understand that I can change my cost-basis election with my broker, but this would only apply to future transactions. The question here is if I can change the cost-basis after I've made the trade.)
No, the standard rule for transactions is First In First Out (FIFO), unless as you said you declare something different before you do the transaction.
The 1099-B is correct.
If you had planned ahead you could have sold both lots and had zero gain. End of the year planning is very important.
No, the standard rule for transactions is First In First Out (FIFO), unless as you said you declare something different before you do the transaction.
The 1099-B is correct.
If you had planned ahead you could have sold both lots and had zero gain. End of the year planning is very important.