Apply Equity Tax Rules
Series 7 · Flashcards
SERIES 7 · FLASHCARDS
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QUESTION
What is the basis method called when the investor uses the average cost of all shares (commonly for mutual funds)?
QUESTION
Which term describes securities that trigger wash sale rules when repurchased: identical or substantially identical?
QUESTION
Using FIFO, what is the basis for selling
150
150
150
shares if lots are
100
@
$
10
100@\$10
100@$10
then
100
@
$
12
100@\$12
100@$12
?
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ANSWER
$1,600. FIFO exhausts the earliest lot first, then prorates the next for the remaining shares sold.
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