Considerations
The IRS allows you to sell mutual funds by Average Cost A costing method by which the value of a pool of assets or expenses is assumed to be equal to the average cost of the assets or expenses in the pool., FIFO First in, first out (FIFO) is the default method used when selling securities by brokerages, the IRS and GainsKeeper. FIFO sells your oldest lots first., or Specific ID This method enables you to specify which shares you are selling in order to reduce realized capital gains.. Once selected, Average Cost is the selling methodology until you completely sell out of that fund. You cannot select Average Cost selling for non-mutual fund investments. Once you sell a fund by Average Cost, your holdings for this fund will automatically be recalculated as average cost.
Selling methodologies are fund specific. The IRS allows you to use Average Cost for one fund and FIFO or Specific ID for other funds. Select View Details>History for a particular fund to see if you previously selected Average Cost.