A taxpayer owns 200 shares of stock in a corporation purchased in two blocks of 100 shares for different amounts and at different dates.The taxpayer sells 100 shares.Barring any specific instructions,the brokerage firm will report the cost basis using the higher cost block of stock first.

Question

Quizplus · Accepted Answer

The brokerage firm will typically use the FIFO (First-In, First-Out) method to report the cost basis unless instructed otherwise, meaning the first block purchased is used to determine the cost basis.

A Taxpayer Owns 200 Shares of Stock in a Corporation