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Understanding Tax Lots

Each time you purchase a security, the new position is a distinct and separate tax lot — even if you already owned shares of the same security. (A tax lot is a record of a transaction and its tax implications, including the purchase date and number of shares.)

A tax lot identification method is the way we determine which tax lots are to be sold when you have a position consisting of multiple purchases made on different dates at differing prices, and you enter a trade to sell only part of the position. We are required by law to track and maintain this information, and to report the cost basis and proceeds to you and the IRS.

Your choice of tax lot ID method can have a significant impact on the amount of taxes you may pay when you sell an asset.

Tax lot ID methods we support:

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Call us: 800-454-9272

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