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Specific identification

Choosing exactly which tax lots are sold, instructed to the broker at or before settlement, to control the size and holding period of the reported gain. United States.

Specific identification is the most flexible method because it lets you harvest a loss from a high-basis lot while keeping a low-basis long-held position, or deliberately realise a long-term gain instead of a short-term one.

The instruction must be given to the broker no later than settlement and confirmed in writing, and most platforms provide a lot selection screen for this. Choosing after year end or changing the selection on your return to something the broker did not report will create a mismatch with form-1099-b.

Watch the interaction with the wash-sale-rule: selecting a loss lot does nothing for you if a replacement purchase inside the 61-day window defers the loss anyway.

General information for the United States only, not tax advice. Rules change and depend on your circumstances, so check with a qualified adviser before relying on it.

Related: cost-basis-methods, fifo-cost-basis, wash-sale-61-day-window, form-1099-b, capital-loss-carryover

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