Tax Lot Accounting


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.

BREAKING DOWN '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.

  1. Net Present Value - NPV

    Net Present Value (NPV) is the difference between the present ...
  2. Dividend

    A distribution of a portion of a company's earnings, decided ...
  3. Portfolio

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

    1. An increase in the value of a capital asset (investment or ...
  5. Taxes

    An involuntary fee levied on corporations or individuals that ...
  6. Accountant

    A professional who performs accounting functions such as audits ...
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