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The following is my scenario: I purchased 100 shares of stock A in November 2019, and 50 more shares of the same stock in November 2020. I sold 70 shares of stock A in December 2020 from which I made some gains.

My question is how do I determine whether those gains are taxes as long or short term since it is not really clear if they belong to the first batch (2019) or the second batch (2020)?

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Most brokers uses FIFO (first in, first out) by default. You probably could have chosen LIFO (last in, first out), actual cost, average cost, or possibly even designation of which shares to sell, but it's too late for that now. The safest course is to check with your broker. But if you didn't make a designation, then just lookup your broker's default policy and that's what you used.

Most likely, if you didn't make any special arrangements, your broker sold the shares you bought first. You should be able to tell by looking at your statement to see what the buy price of those shares is reported as.

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  • You can typically change / define / select which lot you sold during the settlement period, but then it's locked in. – Aganju Feb 26 at 8:11

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