If more than one share of stock or security is received in exchange for one share of stock or one security, the basis of the share of stock or security surrendered shall be allocated to the shares of stock or securities received in the exchange in proportion to the fair market value of the shares of stock or securities received. |
To put it in arguably simpler language: First, every tax lot is treated separately. Within each separate lot, calculate the total basis in the original lot and then divide it equally between each identical share received in the exchange in respect of that lot.
QuoteTo put it in arguably simpler language: First, every tax lot is treated separately. Within each separate lot, calculate the total basis in the original lot and then divide it equally between each identical share received in the exchange in respect of that lot.
What does "tax lot" mean in this context?
So even though I previously used specific ID to sell a few shares, I can switch to average cost basis for the remainder, and do my own calculation of what the basis is for each individual ETF after conversion (total cost for the original mutual fund shares divided by the number of ETF shares)?
Even if you've already selected—and even used—one of these cost basis calculation methods, you can change it for future sales whenever you want. And you can apply those changes to just one fund or to all the funds within an account.
...It looks like I can do what I was asking about. There are several places that say you can change basis as desired, even if the shares were purchased at different times or different dollar amounts....