What is Foolsaurus?

It's a glossary of investing terms edited and maintained by our analysts, writers and YOU, our Foolish community.

Specific identification

Specific identification is one of three methods to determine the cost basis of the mutual fund shares you sell.

Expanded Definition

Under this method, the shares sold are identified by specific purchase date. If you bought shares at different times, you can pick the ones you paid the most for and say that you sold them. That reduces the amount of your capital gain, but you get the same proceeds. This method requires accurate records. You also must notify your fund of the quantities and purchase dates of the shares to be sold. You should also get confirmation from the taxman.

Related Fool Articles

Related Community Blogs

Related Terms

Recent Mentions on Fool.com