How do I change my tax lot selection?
As “cute” as FIFO & LIFO may sound, they are not the names of stuffed animals. Instead, they are more commonly referred to as “First-In-First-Out” or “Last-In-First-Out” and used for tax lot treatment in stock trading.
By default, FIFO is set on all tastyworks accounts. You may request to change your account’s tax lot from FIFO to LIFO tax lot treatment by contacting us at email@example.com. Your selected tax lot treatment will only apply to your trades going forward and cannot be applied retroactively. Furthermore, tax-lot selections are not possible for cryptocurrency trades.
Currently, all tastyworks trading platforms default p/l figures on a FIFO. As a result, any changes to your tax lot will not reflect on the platform. However, from a tax standpoint, your p/l will report based on your selected tax-lot preference.
How can I select a tax lot for a closing trade?
Did you close a position and want to make a tax lot treatment change to your account? You can make a tax lot selection BEFORE the trade settles. Stock trades settle T+2 (trade date plus two trading days), and options settle T+1 (trade date plus one trading day). Contact our trade desk at firstname.lastname@example.org for any tax lot selection requests. Please include as much information as possible, including the symbol, quantity, original opening trade date and total cost, and closing trade date with total proceeds.
Is FIFO or LIFO better? Well, that’s a loaded question because there are many moving pieces to consider when choosing one tax lot treatment over the other. We advise speaking with a tax professional to determine your best tax lot treatment.