How to sell specific tax lots
To sell specific tax lots:
- Select the Trade page
- Enter the symbol you wish to sell
- Select the Sell option
- Select the Sell specific lots option
- Select the check box(s) of the tax lot(s)
- Enter the number of shares you wish to sell for the selected tax lots
- Select Done
- Choose your order type
- Select Review sell order
- Review your order details and select place order
Tax Optimized Option
After selecting the Sell specific lots, the Tax Optimized button will be available. Selecting this option will prompt you to enter the number of shares you wish to sell. Once entered, tax lots will be selected, and respective shares to sell will be entered automatically based on the minimum tax strategy.
The minimum tax strategy aims to reduce taxes owed when selling securities by selling shares in tax lots based on the following order:
- Short-term capital loss from largest to smallest.
- Long-term capital loss from largest to smallest.
- Short-term zero gain or loss.
- Long-term zero gain or loss.
- Long-term capital gain from smallest to largest.
- Short-term capital gain from the smallest to largest.
Default tax lot selling method
If a specific tax lot is not selected when placing a sell order, shares will be sold based on the First In, First Out (FIFO) method. The FIFO method will select shares in the oldest tax lot(s) to sell first.
Frec Securities LLC does not provide tax advice. Every customers tax situation is different, and you are encouraged to consult with a tax advisor.