Share identification under bipartisan attack?

Happened to see this on Kaye Thomas's Fairmark site today and wanted to pass it along:

"...both President Obama and Dave Camp, the Republican Chair of the House Ways and Means Committee have proposed to repeal share identification, the rule that permits investors to choose which shares they?re selling when disposing of part of their holdings. They would replace it with a rule that is far more complicated and produces arbitrary, inaccurate results."

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Reply to
Rich Carreiro
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That article does not say what would replace the current rule.

Reply to
D.F. Manno

This article suggests that average cost basis would be required for all covered shares that qualify for long-term capital gains treatment.

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Ira Smilovitz

Reply to
ira smilovitz

this article does a better job.

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Reply to
Pico Rico

Thank you.

Reply to
D.F. Manno

Also this from Kaye on a message board thread at his site:

They're different. The Camp proposal, which should be available on the website of the Ways and Means Committee, would require use of the averaging rule that is currently available for mutual fund shares. The version in the Obama budget proposal is far worse. It would require averaging only for long-term shares, and it would also require averaging across accounts. If you want to read about that one, you can go to the website of the Joint Committee on Taxation and pull up their recent analysis of the tax provisions in the budget proposal.

The ABA Tax Section has come out with commentary on the Camp proposal in which the relevant committee couldn't agree on whether identification should continue to be permitted but arguing against the averaging requirement. I'm astounded that anyone who thinks seriously about the issue could believe it makes sense to do away with identification, which is necessary for neutrality of investment choice and fairness of tax results. The idea that identification provides the taxpayer with an improper advantage is the product of superficial thinking.

Reply to
Rich Carreiro

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