Specific identification is one of three methods to determine the cost basis of the mutual fund shares you sell.
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
Recent Mentions on Fool.com
- Can Alexion Pharmaceuticals Continue to Deliver?
- Virgin/EMI Act May Become U.S. Success With '90s Nostalgia
- Do Next-Generation Biofuels Pose a Real Threat to Fossil Fuels?
- 5 Questions for a Superinvestor: Christopher Davis, Davis Advisors
- China?s Careful Days
- Synaptics' CEO Touches on Its Biggest Opportunities for Growth