When I donate appreciated mutual funds, I have to specify a “cost basis”; which exact shares do I want to donate? This seems dumb; I always want to donate the shares that have the most unrealized gains. Am I missing something? Why isn’t this done for me? @patio11 @matt_levine
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I mean more as a policy matter...why do I have to specify a cost basis at all? Since there is an optimal choice, why doesn’t Vanguard/IRS compute it for me? You’ve probably convinced me to switch from SpecID to FIFO. Thanks for the reply and suggestion!
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There is not a single optimal choice. Beyond a certain point capital losses aren’t immediately applicable and would require tracking for carry-overs. It may be preferable to defer those losses to a time period where they offset more capital gains.
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