<p>The company that holds most of my mutual funds, ETFs, and stocks has been asking me to make selections on the method to keep track of cost basis as per new IRS regs that require them to report cost basis info to them.
Their current offerings for mutual fund customers is:
Average cost (default)
<p>For Stock and ETF accounts, they offer:
<p>They went on to give a series of pros and cons for choosing one versus another, typically, the more control you want, the more bookkeeping and legwork you need to do. A couple of other fund companies haven't raised this issue at all. </p>
<p>What have you folks chosen, and did you have any problems synchronizing it across different brokerages and fund companies? Have you investigated if there are problems if you use one scheme for some assets while others use another? </p>
<p>I won't do specific identification because it sounds like a lot of work and record keeping. Does the average method (as opposed to, eg. FIFO) force some gains to be short term because it's averaging the old and the new, and does it hence make sense to look at FIFO?</p>