Specific Lot Example
Instructions
The following example demonstrates how to use the Specific Lot matching method.
-
A client makes the following trades:
-
Lot 1 - January 15, 2025 at 2:00PM: buy 100 shares ABC for $10 per share ($1,000 total).
-
Lot 2 - January 30, 2025 at 10:00AM: buy 100 shares ABC for $12 per share ($1,200 total).
-
Sale 1 - January 30, 2025 at 11:00AM: sell 100 shares ABC for $14 per share ($1,400 total).
-
Sale 2 - January 30, 2025 at 12:00PM: sell 100 shares ABC for $8 per share ($800 total).
-
Lot 3 - January 30, 2025 at 1:00 PM: buy 100 shares ABC for $11 per share.
-
Lot 4 - January 30, 2025 at 2:00PM: buy 100 shares ABC for $9 per share.
-
Sale 3 - January 30, 2025 at 3:00PM: sell 100 shares ABC for $6 per share.
-
-
In the Tax Optimizer, the client selects Specific Lots as the matching method for symbol ABC, then clicks the Show button to display the Tax Lot Details panel.
-
If the client clicks the Edit button in the Tax Lot Details panel for Lot 1 or Lot 2, the Match Details window displays Sales 1 and 2. The client can match Lot 1 or 2 to Sale 1 or 2.
-
If the client clicks the Edit button for Lot 3 or Lot 4, the Match Details window displays Sale 3.
Lot 3 or 4 can only be matched with Sale 3.
-
The client cannot match Lot 1 or Lot 2 with Sale 3.
The client cannot match Lot 3 or Lot 4 with Sale 1 or Sale 2.
For example:
-
The client could match Lot 1 with Sale 1 for a long-term gain of $400.
-
The client would then have to match Lot 2 with Sale 2 for a short-term loss of $400.
-
The client could then match Lot 3 with Sale 3 or 4. If the client matches Lot 3 with Sale 4 for a short-term gain of $500, there would be a net long-term gain of $400, a net short-term loss of $900, a basis of $900, and a holding period beginning January 30, 2025 for the remaining open lot.
Or:
-
The client could match Lot 1 with Sale 2 for a long-term loss of $200.
-
He would then have to match Lot 2 with Sale 1 for short-term gain of $200.
-
If the client matches Lot 3 with Sale 3 for a short-term loss of $200, he would then have a net long-term loss of of $200, no net short-term gain or loss, and a basis of $600 and a holding period beginning January 30, 2025 for the remaining open lot.