The rules on using average cost basis say that until you use average cost, you may use actual cost (with the shares sold identified either explicitly, or implicitly according to FIFO). But once you use average cost basis in a sale, you must use that method for all the shares you own/control.
What happens if you've been using actual cost, but are gifted shares (that you didn't previously control) from an account where there were sales using average cost basis. Are your existing positions now "contaminated" - are you doomed to using average cost (unless the IRS grants you absolution)?
To make matters worse (just for the heck of it), what happens if the gifted shares used single category, and your existing shares used double category - these are inconsistent and I don't know of any ordering rule (which one takes precedence).
Mark Freeland snipped-for-privacy@nyc.rr.com
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