I want to sell one mutual fund that I own in Vanguard to claim a tax loss on it. The default cost basis offered in Vanguard is "Average Cost" method. But I calculated that if I use the spec id method, I would be able to claim a greater tax loss. So I have updated the cost basis method in Vanguard to use specific lot id for selling the fund.
Vanguard is not able to show lot id for shares that I had purchased before 2012. Though I am able to get this information from the transaction history. If I continue to sell the shares, Vanguard states that it will report only the average cost basis to IRS.
My questions are:
Will I be able to use the specific shares cost basis for shares bought previous to 2012, if Vanguard reports only the average cost basis to IRS?
If I am allowed to use the spec lot id method, how should I inform IRS when filing taxes next year about the cost basis that I calculated using specific shares?
What kind of documentation will I need to provide as proof for the specific share cost basis calculation?
If I want to buy back the same fund and avoid it being categorized as a wash sale, according to IRS rules for wash sales, I need to wait for at least 30 days. When does this 30 day period start? How would it get affected if I sell shares over multiple days versus in a single day?