The Tax Optimizer lets you select one of the following lot-matching algorithms when changing the matching method or running what-if scenarios:
First In, First Out (FIFO) - The default method for matching tax lots. Sales are paired with the earliest purchases sequentially. FIFO assumes that assets remaining in inventory are matched to the most recently purchased or produced assets. FIFO is always used for futures and options on futures.
Last In, First Out (LIFO) - Each sale is paired with the most recent possible purchase. LIFO assumes that an entity sells, uses or disposes of its newest inventory first.
Maximize Long-Term Gain - Sales are paired based on the following set of priorities:
1. Maximize Long-Term Gain per share
2. Maximize Short-Term Gain per share
3. Minimize Short-Term Loss per share
4. Minimize Long-Term Loss per share
Maximize Long-Term Loss - Sales are paired based on the following set of priorities:
1. Maximize Long-Term Loss per share
2. Maximize Short-Term Loss per share
3. Minimize Short-Term Gain per share
4. Minimize Long-Term Gain per share
Maximize Short-Term Gain - Sales are paired based on the following set of priorities:
1. Maximize Short-Term Gain per share
2. Maximize Long-Term Gain per share
3. Minimize Long-Term Loss per share
4. Minimize Short-Term Loss per share
Maximize Short-Term Loss - Sales are paired based on the following set of priorities:
1. Maximize Short-Term Loss per share
2. Maximize Long-Term Loss per share
3. Minimize Long-Term Gain per share
4. Minimize Short-Term Gain per share
Highest Cost - Seeks to maximize losses while minimizing gains. Sales are paired based on the following rules:
First, it looks at all possible options for matching a closing trade to an open lot.
If any possible matches would result in a loss, the method chooses the match that results in the largest possible loss.
If no possible match would result in a loss, the method chooses the match that results in the smallest possible gain.
Specific Lot - Lets you see all of your tax lots and closing trades, then manually match lots to trades. Specific Lot is available for today or a position, but not it is available as the Account Default Match Method.