AboutJay Kay Expertise As a private investor for the past 40 years, I have experienced both bull and bear markets, and have lived to tell the tale. I should be able to provide you with serious, practical insights into managing stocks, bonds and mutual funds in your portfolio, along with useful information concerning most aspects of personal finance. No specific stock/bond recommendations furnished.
Question I have purchased stocks from a particular company on several different occasions and at different price levels. If I needed to sell part of my shares would there be any benefit in selling the shares that were initially priced higher or lower, or does it make any difference?
Answer There are various factors to consider here. The difference between long term and short term can be considerable from a tax standpoint, whether you are selling to protect a capital gain or to establish a capital loss. You can easily determine the difference between the purchase price and the potential sale price. Simply go on from there to note gain/loss, long term/short term, and proceed according to your intended purpose. I have been told on good authority (never having done this myself) that your broker can note on the sales confirmation which shares (via purchase date) are the ones being sold. Otherwise, IRS will consider the transaction "Last In, First Out," meaning that the sale was of your most recently purchased shares.
So as you can see, it DOES make a difference.
