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The only issue I have had with Robinhood is regarding tax planning, because they only support FIFO sell orders. There have been several instances where I would
by kvna 7y ago
The only issue I have had with Robinhood is regarding tax planning, because they only support FIFO sell orders. There have been several instances where I would have preferred to sell shares purchased more recently, so that my older shares can pass the one year threshold for long term capital gains. The ability to specify lots when selling shares would be worth money to me.
- earthshot 7y agoThis is the precise reason that I only use Robinhood as a toy trading account. Give me a 'maximize losses' tax basis, please!
- btown 7y agoIf Robinhood were to roll this out they'd inevitably do it in a way that counted as tax advice, getting them in tons of legal hot water, because they wouldn't be able to help themselves on the marketing side. So it's actually rational for them not to bother building this incredibly obvious feature. /s
- rconti 7y agoCan't you use whatever accounting method you wish, regardless of how they report it?
- adammenges 7y agoYeah would love an answer here too
- bjacokes 7y agoWhen you sell shares, cost basis is reported to the IRS by the brokerage. The parent comment suggests that RH always reports the FIFO cost basis, i.e. price of the first shares you bought as opposed to the last shares. There are places on tax forms where you can adjust your cost basis up or down from the one reported by your brokerage, but (without doing any research into it) I doubt that "I don't want to use my brokerage's cost basis method" is a valid reason to use those.
- rconti 7y agoI really have no idea, but it's a VERY new thing that brokerages even report this information. The 1099-B can't be more than a decade old. You used to have to track it all yourself. I suspect you can use your own cost basis method. (subject to rules; of course you have to be consistent) That said, this is definitely not tax advice, and even if it's legal/allowable, you're almost certainly more likely to be audited if your numbers don't agree with what the brokerage reports.
- tanderson92 7y agoThis is why Form 8949 (column (f)) exists.
- smogcutter 7y agoAren't the shares fungible?