New Investors Discover Tax Pitfalls of Robinhood and Other Trading Apps

[progree]

5. That's good to hear -- I also have a spreadsheet with all the lots and what I paid for them

and whether the fund is a "virgin" or not -- if a "virgin", meaning I've never sold any shares from the fund -- then I can supposedly specify whatever share method (specific identification, LIFO, most expensive first, whatever). If it's something I've sold shares from before using some method, then it is a "non-virgin" and I have to stick to the method I've been using before on it.

(this just for stuff in my regular taxable accounts -- don't have to do this crap with IRA accounts).

It's just when I read the rules about the advanced stuff in writing and on and on that cause me to dread ever having to do the specific share identification process. But if the incentive is strong enough, and if I have enough time in advance before needing to make the sale, then I'll try to do that.

I also am still mad as hell at Schwab who changed their method of average cost accounting -- without telling us, they in effect broke our accounts into two parts - one part with pre-2012 shares, and the other part with 2012-and-after shares -- and they sold the pre-2012 shares first (which are the lowest-priced ones generally and in my case, leading to higher capital gains). I wrote them a long long email about that after I investigated all their arcane rules and rule changes and on and on.

So I'm having PTSD on the whole issue.

On edit - for stuff in regular accounts, I've turned off automatic reinvesting of dividends and other distributions, to make the cost-basis accounting easier. Periodically, when I have more cash in the account than I want (because of the distributions), then I make a decision on which fund(s) to invest that cash in.

Edited to add - yes, they've automated the figuring of cost basis beginning in 2012 for mutual funds -- and some other different years for other assets -- but I believe in TRUST BUT VERIFY so I still maintain my spreadsheets. And it turned out that the "TRUST" part was broken by Schwab as described above. Also, for shares bought pre-2012, they don't have cost basis info for that, so I had to supply that to them. It's now included in their cost-basis accounting, but they include a footnote on the statements that in essence say that the cost basis (of the pre-2012 shares) was supplied by client. Sigh.