Tax Lots

Each purchase or sale of an asset (typically a stock or fund) is identified as a tax lot. Specific entries that define a lot are described in other topics. Review the content in this list if you need a refresher.

Every tax lot occupies a row in the asset table. If there is only one lot, the topics above cover everything you need to know. Otherwise, continue reading to see how to deal with multiple lots.  This fragment of the asset table is the focus of our discussion.


The first row, ticker VIG, is a one-lot asset exactly the same as in previous topics. The second row, ticker VTI with down-pointing disclosure triangle, represents a multi-lot asset. Think of this row as a parent.  The last three rows identify individual lots, children of the parent. Each lot has a different date bought, although the dates could be the same if the purchase price differs. The "parent" does not display date entries unless all child dates happen to be the same. Use the disclosure triangle to switch views, parent or parent plus children.

Select a parent or child row and click on Add Lot to generate a new lot.  Enter additional items on the row to fully define the lot. The Remove button removes the selected lot or all lots if a parent is selected. Removing a lot when there are two lots initially will result is a simple one-lot asset (i.e., without the disclosure triangle).

Contents of the parent row are calculated from child rows. The example below expands the earlier discussion to cover some subtle details.

TaxLotsFull

One lot of VTI was sold on 4/5/13 at a price of $80/share. With a $65/share basis, the realized capital gain is $15/share.  The other two lots are currently held, each with their own basis and unrealized gains as determined by the current price of $95/share.

The parent content does not include lots that have been sold. There are 350 parent shares, 300 bought on 12/20/07 and 50 on 5/12/14.  The average basis for these is $74/share (or a total basis of 25,900).

As described in Basis & Gain, the total value (40,650) appears in a separate row below the main table. It is the sum of all currently held assets, i.e. excluding lots that have been sold. The total basis (31,900), also currently held assets, is a dollar value as is the unrealized gain (8,750).  Total basis and total gain are not meaningful as a per share value.

Next we change the example slightly to show the view after a partial sale. All 100 shares of VTI bought on 1/7/11 were sold on 4/5/13. Suppose that only 25 shares had been sold. Our asset table would have to be updated to reflect this partial sale. As an illustration, these steps would be required.

  • Select the 1/7/11 lot, before the date sold is entered
  • Add Lot
  • Enter the number of shares remaining (75) for this new lot
  • Select the original 1/7/11 lot and change shares from 100 to 25
  • Enter the date sold
  • Enter the price at which the shares were sold after the date sold is entered

Here is a view after performing those steps. The first highlighted row contains the 25-share lot sold on 4/5/13 with the remaining 75 shares on the next row. Look closely at the other entries.  The sold price is 80 while the current price is 95. Basis (per share) is 65 for both lots.

TaxLotsPartialSale

 

Tips & Tricks

Balancing Act automatically formats most numbers. An example appears above in the Basis and Gain columns each of which now display three fractional digits. The parent VTI row has these extra digits as a result of recalculation after the partial sale. Notice that the decimal point is aligned for the entire column, to enhance readability.