TradeAlmanac
Sign in

FIFO for tax purposes

The rule that a partial sale draws down the earliest purchases first: the cost is taken from the first parcel bought rather than from an average price.

How to read the number

Hence the divergence from a broker's app: the interface shows an average price for the position while the tax is computed parcel by parcel, and the results differ.

When the metric lies

Also known as: first in first out cost basis

Related terms