Are you trying to sell all of the shares?
No. Only the small loss on the covered shares.
If so, the net gain/loss should be independent of what method you use (tho there could be a variation is long/short term distribution).
Have you selected a cost-basis method for your covered shares?
Yes. Spec. ID
Have you previously sold covered shares?
I would check w/ VG to be sure but I would think since AVB is the default method for non-covered shares (and since VG is not reporting that info to IRS anyway), you could have different methods for covered and non-covered shares.
From Vanguard’s website:
For shares purchased before January 1, 2012, and subsequently sold (known as noncovered shares), we’re only able to provide average cost information because we won’t know which cost basis method you used in the past or which tax lots remain in your account.