Tax Lot Accounting

AAA

DEFINITION of 'Tax Lot Accounting'

A record keeping technique that traces the dates of purchase and sale, cost basis, and transaction size for each security in your portfolio, even if you make more than one trade in the same security.

INVESTOPEDIA EXPLAINS 'Tax Lot Accounting'

The goal is to minimize the net present value of your current taxes by deferring the realization of capital gains and recognizing losses sooner.

RELATED TERMS
  1. Net Present Value - NPV

    The difference between the present value of cash inflows and ...
  2. Capital Gain

    1. An increase in the value of a capital asset (investment or ...
  3. Portfolio

    A grouping of financial assets such as stocks, bonds and cash ...
  4. Dividend

    1. A distribution of a portion of a company's earnings, decided ...
  5. Expanded Accounting Equation

    The expanded accounting equation is derived from the accounting ...
  6. Earnings Per Share - EPS

    The portion of a company's profit allocated to each outstanding ...
Related Articles
  1. Using Tax Lots: A Way To Minimize Taxes
    Taxes

    Using Tax Lots: A Way To Minimize Taxes

  2. The Workings Of Equity Portfolio Management
    Professionals

    The Workings Of Equity Portfolio Management

  3. Capital Gains Tax 101
    Taxes

    Capital Gains Tax 101

  4. After-Tax Balance Rules For Retirement ...
    Taxes

    After-Tax Balance Rules For Retirement ...

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center