OK fellow tax computation fiends, I'm getting conflicting opinions about the following. For determining my cost basis of a mutual fund, if during previous years I have sold specific lots and identified them for tax purposes, can I during later tax years sell bunches of shares (non-specific lots) and use average cost basis (average of all shares other than the previously sold/identified ones)?
Some people say no because that's switching cost basis methods, something not allowed. Others say it's permitted because the math works, that is, I could assemble of bunch of specific shares that would average to the average cost basis of them all; these people say that once I do use average basis I must stick with it since the math does not support switching the other direction (from average to specific lot identification).
I am asking because after several decades of buy and hold I lack compete info on some MFs set to reinvest: for some of the reinvestments the old statements show the dollar amount of the reinvestment but omit the number of shares then purchased.
Some people say no because that's switching cost basis methods, something not allowed. Others say it's permitted because the math works, that is, I could assemble of bunch of specific shares that would average to the average cost basis of them all; these people say that once I do use average basis I must stick with it since the math does not support switching the other direction (from average to specific lot identification).
I am asking because after several decades of buy and hold I lack compete info on some MFs set to reinvest: for some of the reinvestments the old statements show the dollar amount of the reinvestment but omit the number of shares then purchased.