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If I held shares of a specific stock since 2016 in one account (let's say Fidelity) and would like to day trade the same stock in another account (E-trade) would the cost basis be treated separately between the accounts?

For example:

1/1/2016 Purchase 100 shares in Fidelity at $10

1/1/2020 Purchase 5 shares in E-trade at $20

1/5/2020 Sell 5 shares in E-trade at $30

Will the basis of the sale be $10/share or $20/share?

Would the above example show a profit of $50 or $100?

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The trades will be matched in the account that you trade them in. For trading purposes, you cannot designate shares at one broker be matched with shares at another.

Ironically, shares at different brokers are considered in toto for tax purposes (wash sales). You cannot take a loss in one account and then replace them with a substantially identical security in another account (within the 60 day window around the loss date).

At the end of the year, each broker reconciles your trades, provides you with a copy and reports the trades to the IRS. E*Trade isn't going to contact Fidelity (or vice versa) and work out some cross pollination of accounts :->)

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  • Thank you for your response. So as long as there isn't a loss (wash sale), then the sales are matched with the shares in their specific accounts for tax purposes? Would the example above show taxable income of $50 or $100? – Seb Mar 18 at 23:05
  • YW. Cost basis is $20 with gain of $50. – Bob Baerker Mar 18 at 23:13

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