![]() ![]() Jeff Kauflin, a staff writer at Forbes who recently co-authored an insightful profile on the company, pointed out her tweet to me. ![]() She brought this wording on the Robinhood site to broader public attention through her tweet about it. Meg Bartelt is a financial advisor and the founder of Flow Financial Planning in Bellingham, WA, focused on financial planning for women in early to mid tech careers. The shares themselves are not specifically tracked, but the cost associated with those shares is expensed first.” This means that your longest-held shares are recorded as having been sold first when you execute a sell order. On its website, under Cost Basis, Robinhood states: “Robinhood uses the ‘First In, First Out’ method. Is FIFO For Cost Basis Mandatory At Robinhood? You can do so, he explained, by making the proper reporting adjustments on Form 8949 of your tax return that is filed along with Schedule D. Should your records differ from the broker’s tax reporting shown on the 1099-B sent to you and the IRS, you can still fix it. “The safe harbor for a taxpayer to elect the specific identification is to #1 communicate to the broker in writing their election at the time of sale or transfer.” Second is to “receive a confirmation from the broker in a reasonable timeframe afterwards.” He suggests you timely communicate with the brokerage firm your intent and then keep your records as to which lots you sold per each transaction. Schmerling, a financial advisor and CPA with Schmerling Financial Group (Jenkintown, PA, and Silver Spring, MD), explained to me that stock traders can use the FIFO method or elect to identify specified shares. Using the longest-held shares makes it more likely that the capital gains will be long-term and taxed at a lower rate, but not always with the smallest gain, as this example shows. While brokerage firms often use FIFO as the default, they do allow a choice. ![]()
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