Submitted By: Kathy
Answered: December 9, 2015 11:47 am

Can I use the specific identification method for the sale of stock this year even though I used FIFO for sales of the same stock in the past?

Yes. The specific identification method allows you to use the cost basis of the shares you sell to figure your gain or loss. FIFO, or first-in, first-out, is the default method for figuring basis if you do not instruct your broker or agent to use the specific identification method. You can override FIFO at any time buy giving directions to your broker; get a written confirmation that you are using the specific identification method.

advertisement
Tax Glossary

Estimated tax

Advance payment of current tax liability based either on wage withholdings or installment payments of your estimated tax liability. To avoid penalties, you generally must pay to the IRS either 90% of your final tax liability, or either 100% or 110% of the prior year’s tax liability, depending on your adjusted gross income.

More terms