The account-level cost basis disposal method applies to both retirement and nonretirement accounts in account types 1 (cash), 2 (margin), and 3 (short). By default, the account-level disposal method is used as the transaction-level disposal method. View the account-level disposal method on Account Profile, and if entitled, edit the disposal method. (View account information)

For nonretirement accounts, when you enter a closing transaction for a position that is not average cost, you may specify a transaction-level disposal method or specify the shares to deplete. This disposal method selected at the transaction-level applies to the transaction only and does not change the account-level disposal method.

Eligible closing transactions include, where entitled:

• Equities
  Sell, Buy to Cover, Sell (Deliver by S/D), Sell Short (Locate Exempt)
• Options
  Buy Calls to Close, Buy Puts to Close, Sell Calls to Close, Sell Puts to Close
• Mutual Funds
  Sell Fund, Exchange Fund, Cross Fund Family

Note
When the FIFO or INFI disposal method is used, tax lots with unknown cost deplete first. For all other disposal methods, tax lots with unknown cost deplete last.

Mnemonic	Name	Description
FIFO	First-In, First-Out	Shares with the oldest holding period date are disposed first, regardless of unit cost (basis per share). Shares with unknown cost basis will be depleted first.
HICO	High Cost In, First-Out	Shares with the greatest cost basis per share acquisition cost are disposed of first. If more than one lot has the same price, the oldest shares will be depleted first.
HICL	High Cost In, First-Out, Long-Term	Shares with a long-term holding period date (> 1 year) are disposed first, beginning with the greatest cost basis per share. Then shares with a short-term holding period date (< 1 year) are disposed, beginning with the greatest cost basis per share.
HICS	High Cost In, First-Out, Short-Term	Shares with a short-term holding period date (< 1 year) are disposed first, beginning with the greatest cost basis per share. Then shares with the long-term holding period date are disposed, beginning with those shares that have the greatest cost basis per share.
INFI	Intraday First-In, First-Out	Shares purchased on the sale date are disposed first. Once all lots purchased on the sale date are depleted, the disposal method reverts to FIFO. Shares with unknown cost basis will be depleted first. ! Important: Time-stamps on trades are not used to determine the order intraday lots are depleted.
LIFO	Last-In, First-Out	Shares with the most recent holding period date are disposed of first, regardless of the unit cost (basis per share).
LOCO	Low Cost In, First-Out	Shares with the lowest cost basis per share are disposed first, regardless of holding period date.
LOCL	Low Cost In, First-Out, Long-Term	Shares with a long-term holding period date (> 1 year) are disposed first, beginning with the lowest cost basis per share. Then, shares with a short-term holding period date (< 1 year) are disposed, beginning with the lowest cost basis per share.
LOCS	Low Cost In, First-Out, Short-Term	Shares with a short-term holding period date (< 1 year) are disposed first, beginning with the lowest cost basis per share. Then, shares with a long-term holding period date (> 1 year) are disposed, beginning with the lowest cost basis per share.
PROP	Proportionate	Shares in all available lots, including unknown, are disposed proportionately. ! Important: This disposal method is not available as a default disposal method and is only eligible for VSP requests by disposal method.
STTS	Short-Term Tax Sensitive	Lots are depleted in the following sequence: Short-term lots disposed at a loss (high loss to low loss, or highest cost to lowest cost) Long-term lots disposed at a loss (high loss to low loss, or highest cost to lowest cost) Short-term lots disposed at no gain or loss Long-term lots disposed at no gain or loss Long-term lots disposed at a gain (low gain to high gain, or highest cost to lowest cost) Short-term lots depleted at a gain (low gain to high gain, or highest cost to lowest cost)
TXSN	Tax Sensitive	Share depletion first considers lots in order to maximize the loss amount. Then the IRS long- and short-term tax rates are considered along with the gain to minimize the tax burden.

 

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