We have invested in couple of mutual funds, would like to redeem shares (sell all shares in one transaction), and close the account in 2021. All capital gains are “long-term.” The mutual fund company is using average cost basis for both covered and non-covered shares. Our tax filing status: married filing jointly and our capital gains rate is 15%. I am also planning to sell worthless securities which could result in a capital loss of $3K to offset capital gains.
My question is, do I need to ask the mutual fund company to compute cost basis based on FIFO (First-In-First-Out) to compare it with average cost basis for covered shares? Does it make a difference in our case since we are selling all the shares and capital gains are long-term? The mutual fund company has indicated to me that for “non-covered”, they only use “average” cost basis. Please provide your suggestions and comments. Thanks for your help. Regards, Dabu.