Specific Lot Example

The following simple example demonstrates how to use the Specific Lot matching method.

  1. A client makes the following trades:
  • Lot 1 - January 15, 2012 at 2:00PM: buy 100 shares ABC for $10 per share ($1,000 total).
  • Lot 2 - January 30, 2013 at 10:00AM: buy 100 shares ABC for $12 per share ($1,200 total).
  • Sale 1 - January 30, 2013 at 11:00AM: sell 100 shares ABC for $14 per share ($1,400 total).
  • Sale 2 - January 30, 2013 at 12:00PM: sell 100 shares ABC for $8 per share ($800 total).
  • Lot 3 - January 30, 2013 at 1:00 PM: buy 100 shares ABC for $11 per share.
  • Lot 4 - January 30, 2013 at 2:00PM: buy 100 shares ABC for $9 per share.
  • Sale 3 - January 30, 2013 at 3:00PM: sell 100 shares ABC for $6 per share.
  1. In the Tax Optimizer, the client selects Specific Lots as his 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 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.
  • He 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 he matches Lot 3 with Sale 4 for a short-term gain of $500, he would have a net long-term gain of $400, a net short-term loss of $900, and a basis of $900 and a holding period beginning January 30, 2013 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, 2013 for the remaining open lot.