Capital gains tax on stocks?

Question

Hi,

I had a capital gains tax question. I know the difference between short and long term gains. My question is...what if I bought a stock over a year ago, have added more positions in it as it has been going down and recently the stock shot back up and I sold a portion of my holdings (overall still negative on my entire position). Is that considered a long term loss (based on when I initially bought the stock) or short term gain (I bought more position at the bottom and sold about the same at a higher price a week later). Thanks, sorry about the long question.

Answer 1

If you did not specify which shares were sold, the default is first in first out.  So the older shares are sold first.

Answer 2

You can direct your broker to sell particular shares, the older ones or the newer ones.  The long or short term depends on which shares were sold.  It might be a combination, like 100 shares long term and 23 short term - then you'd show it on your schedule D as two separate lines, one line in each section.