Identifying Lots In A Stock Sale

If you buy the same stock at different times, you will hold what is referred to as multiple "lots" of it, each with their own cost basis. For example, if your club does automatic dividend reinvestment, each time you receive a dividend, you purchase a new lot of stock.

If you own multiple lots and you don't sell all of your holdings at once, you'll need to identify which lots were sold.

By default, bivio assumes your lots have been selected on a First In First Out (FIFO) basis. This is the default also required by the IRS unless you tell your broker to sell different lots prior to settlement of the sale. Your capital gains and losses are calculated by subtracting your cost basis for the specific lots you sold from your sales proceeds.

Brokers will now allow you to set a default "Cost basis Method" if you'd like to select lots using some method other than FIFO on a regular basis. Or, you can make a selection at the time of the sale.

If you choose something other than FIFO, you'll need to manually adjust your bivio records to agree with your brokerage. You can do this by editing the sale entry.

Here are the steps:

  1. Find the sale transaction by going to Accounting>Investments and clicking on the stock name.
  2. Edit the transaction by clicking on the edit link at the end of the line. This will open up the sale entry form.
  3. In the middle of the form, you'll see a little button labeled "Lots".
  4. Select it and a form will open where you can identify the specific lots that were sold.

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