Hi Reilly,
If you do not select "Specific Shares" then FIFO is default. If you explicitly opt with Fidelity to use LIFO or average method and do not select "Specific Shares" then LIFO or average would be assumed. However, this is the help line from Fidelity regarding specific share sales:
<begin Fidelity>
What is the advantage of selling shares using the specific shares cost basis method?
Because you can choose the tax lot(s) you are selling, selling specific shares gives you more control over the gain or loss realized by a sale. If you sell tax lots with higher cost, you may expect a lower realized capital gain. Conversely, if you sell tax lots with lower cost, you may expect a higher realized capital gain.
<end Fidelity>
Here is an excerpt from irs.gov (circa sept 2018) regarding basis:
<begin IRS>
Question
How do I figure the cost basis when the shares I'm selling were purchased at various times and at different prices?
Answer
The basis of stocks or bonds you own generally is the purchase price plus the costs of purchase, such as commissions and recording or transfer fees. When selling securities, you should be able to identify the specific shares you are selling.
If you can identify which shares of stock you sold, your basis generally is:
What you paid for the shares sold plus any costs of purchase.
If you can't adequately identify the shares you sold and you bought the shares at various times for different prices, the basis of the stock sold is:
The basis of the shares you acquired first, then the basis of the stock later acquired, and so forth (first-in first-out). Except for certain mutual fund shares and certain dividend reinvestment plans, you can't use the average basis per share to figure gain or loss on the sale of stock.
<end IRS>
So, it appears there is no overall IRS requirement that you cannot sell specific shares and use the cost basis of those specific shares to calculate gain/loss, provided that Fidelity has kept track of each lot purchase date/basis.
Hope this helps!
