How do I handle capital gains on the same stock I purchased multiple times same year?

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How do I handle capital gains on the same stock I purchased multiple times same year?

Post by funnyinterestingcool » Tue Dec 15, 2020 6:19 pm

To account for different purchase dates, you'll have to break your purchases out into separate lots on your tax forms, even if you sell your stock all at once. For example, if you sell 1,000 shares that you bought in four different purchases, you must list four entries on your tax forms. The IRS allows you to identify the shares you want to sell at the time of your sale if you want to sell a specific lot. Otherwise, the IRS requires "first-in, first-out" accounting, meaning the first shares you sold are the first ones you acquired.

Short-term gains will ultimately be taxed as ordinary income, while long-term gains, those held for one year or longer, will qualify for a lower tax rate.

So, any of the same stock you purchased in the same year has to mature 1 year before it can be considered a long-term gain. The stock that has matured past a year is long-term gains.
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