When selling stocks, which method of calculating basis provides the greatest opportunity for minimizing gains or increasing losses?

Question

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Specific identification allows the investor to choose which shares of stock to sell, which provides the greatest opportunity for minimizing gains or increasing losses. This is because the investor can select shares with the highest cost basis (which will result in lower gains) or the lowest cost basis (which will result in higher losses). However, this method may not be practical if the investor holds a large number of shares with varying purchase prices.

When Selling Stocks, Which Method of Calculating Basis Provides the Greatest