Here is the scenario. Lets say,
BATCH_1: My company purchased ESPP on my behalf at $8.50(15% of $10) on JAN 2016. BATCH_2: My company purchased ESPP on my behalf at $10.20(15% of $12) on AUG 2016. BATCH_3: My company will purchase ESPP on my behalf at $17.00(15% of $20) on JAN 2017.
Say the stock price is @ $20 by Feb 2017. I will sell my BATCH 1 stocks, coz its been over an year, so the tax paid will be 15% on profit.
But I don't want to sell my BATCH_2, since I will end up paying more tax, since it will be seen as short term capital gains (roughly around 40% on profits).
I want to sell BATCH_3, even though it qualifies as short term capital gain the profit made is much less compared to BATCH 1 & 2. So I don't really mind.
Question: ETrade offers me option to sell BATCH 1,2 & 3 separately. If I sell BATCH 1&3, will I be taxed appropriately or will they tax First in First Out based on the number or shares?