There are two settings- one is how cost basis is tracked and one is default disposal method. You want cost basis tracked at Actual Cost. Your default disposal method can be whatever you want it to be, because you can always select specific lots at the time of disposal.I'm also curious. I don't have an account with Fidelity but Vanguard sent me a message about trying their new "MinTax" cost basis method and this "Tax Sensitive" option for cost basis method at Fidelity sounds similar. Vanguard's is using an automated algorithm to pick lots to minimize current year tax burden and as best I can tell there's no associated cost for picking MinTax over SpecID or AvgCost as the basis method.I'm not certain what Fidelity calls their version of spec ID, but maybe someone who uses Fidelity will chime in with an answer.
I'd only be guessing... Specified Lots maybe???
Some have pointed out that MinTax is still not as flexible as SpecID because it could minimize your taxes in year X which might result in an even bigger unrealized gain in year X+10, but at least it's an easy approximation of TLH for those that find choosing specific lots too burdensome.
My guess is that Fidelity wants to offer a similar cost basis method (and like Vanguard's offering it's probably not a human service but an automated algorithm at no added cost to the investor).
Account Settings>>Cost Basis Information Tracking>>Actual Cost
If I recall correctly, I had to call or send a letter to get mutual funds changed to Actual Cost. But they may have automated it since then.
Again, brace yourself for getting an answer that you can only change this default for future purchases. If you have ever sold from that account, it may be the answer you get.
Statistics: Posted by lazynovice — Wed Mar 20, 2024 10:11 am — Replies 17 — Views 967