Comments on: Wells Fargo’s Free Trade offers HIFO

By: Mike

Mike — Mon, 06 Aug 2007 08:29:15 +0000

Well, it turns out I had the wash-sale rule backwards. I thought that selling the older shares would avoid a wash sale. Actually, selling the *newer* shares is required to avoid a wash sale.

When selling older shares, newer shares are considered replacements. However, when selling newer shares using specific identification (i.e. HIFO), older shares are *not* considered replacements. See example 4 on this page: http://www.fairmark.com/capgain/wash/wsreplac.htm.

So, HIFO may be the best option even if you have bought shares in the last 30 days. Just make sure you understand the wash sale rules and how HIFO will impact your sale.

By: Mike

Mike — Fri, 03 Aug 2007 22:42:24 +0000

Yes, this happened to me yesterday. I called Wells Fargo and the CSR was very helpful. She took my information, then put me on hold while she relayed the instructions to a trader. Took about 5 minutes. So far I’ve been very impressed with Wells Fargo’s customer service.

The only downside is that the online Tax Tracker assumes that all shares are sold strictly using HIFO. AFAIK there’s no way to adjust this for specific tax lot sales.

By: indexfundfan

indexfundfan — Thu, 02 Aug 2007 19:03:28 +0000

Mike, thanks for your feedback.

Have you tried calling Wells Fargo to specify the tax lot after a trade? Was it easy, i.e. did the CSR know what you are talking about when you call or are they clueless?

By: Mike

Mike — Thu, 02 Aug 2007 18:14:13 +0000

One thing to be aware of: when determining the shares with the highest cost basis, Wells Fargo includes shares that have bought in the last 30 days and would be a wash sale. This means that HIFO does not do what you want, if you are selling to realize a tax loss and have shares within the wash sale window. In this case, you can call Wells Fargo after you make the trade online (but in the same business day) to specify the tax lot.

By: indexfundfan @ indextown » Blog Archive » How does Wells Trade measure up?

Thu, 26 Apr 2007 15:37:54 +0000

[...] tracking and tax reporting information – Wells Trade does provide cost-basis tracking and offers HIFO cost-basis accounting (useful for minimizing taxes) if you elect to do [...]

By: indexfundfan @ indextown » Blog Archive » Wells Fargo’s Free Trade : ACH & Cost Basis

Fri, 09 Mar 2007 16:50:25 +0000

[...] mentioned in a previous post, the brokerage account supports the HIFO method of accounting for tax reporting. The question that [...]

By: indexfundfan

indexfundfan — Sun, 04 Mar 2007 17:24:27 +0000

Hi Dave,

There is nothing special in the signup. In the brokerage tab, click on “Go to Portfolio Analyzer”, then click on “Portfolio Tracker”. The system would prompt you to signup.

Let me know if it works for you.

By: Dave

Dave — Sun, 04 Mar 2007 13:19:44 +0000

What were the specific steps that you had to follow to sign up for the Portfolio and Tax Tracker tools?