A.I.M. Users Bulletin Board

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Tom, we are using the same definitions. It may well be my thinking that is convoluted. My logic goes something like this:

Using LIFO for taxes causes the early shares to age as rapidly as possible and therefore they will become LT ASAP -- which is good. The bad part is that the trades will almost always be reported as ST gains in the years they occur. Eventually this will build up a cache of LT shares.

Using FIFO for taxes uses the oldest shares first, so any shares that get into LT status are going to be sold off and the LT shares cache can be used up and everything would be held as ST shares.

Just writing this up has helped me observe that LIFO forces me to pay ST taxes on almost all my trades (in favor of building a larger LT cache of shares), and that FIFO lets me pay LT taxes on almost all my trades.

This should be even more obvious to me once I have been at this for a couple years.

Thanks for the insight.

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