Specific identification method
Specific identification method
How it works
You select the exact shares you want us to sell or transfer. You can select this method at the time your trade is placed online or by contacting Vanguard before the end of the settlement date. If you are in average cost today, you’ll need to change your method to another method first to use this method.
Get details on covered & noncovered shares
Learn more about the average cost method
If you plan to use this method for shares currently using the average cost method, we encourage you to plan ahead as you must elect out of average cost in writing before making the trade and it takes one business day to make specific identification data available for display online.
Why you might prefer the specific identification method
This method provides the most flexibility for tax planning strategies.
A few things to consider
Be prepared to be hands-on
This method requires more effort: Generally, you must specify before the settlement date the shares to be sold or transferred and Vanguard must confirm those specifications back to you within a reasonable time.
We try to make this easier by giving you quick online access to the potential gain or loss for each share or lot.
More recordkeeping may be required
For noncovered shares, Vanguard provides cost basis for informational purposes only. Vanguard only has average cost information for most noncovered mutual fund shares, but we may display the non-average cost if it’s available. You are responsible for reporting cost basis information to the IRS according to your records.
We won't report cost basis for noncovered shares to the IRS.
Get details on covered & noncovered shares
You remain responsible for reporting your cost basis information to the IRS every year on Form 1040, Schedule D, for all shares sold, whether they're covered or noncovered. You should use your own records in addition to the cost basis information we provide.
In addition, for covered shares, the information you report in column (e) on Form 8949 must match what we send to the IRS on Form 1099-B.
Select a cost basis method
This information is general and educational in nature and should not be considered tax and/or legal advice. We recommend you consult a tax and/or legal adviser about your individual situation.