| Broker | What the broker says about specific identification*... *(quoted directly from the broker's e-mail, surrounding text omitted) | ...and what it means |
|---|---|---|
| Ameritrade | "You will be able to make a versus purchase [i.e., specific ID] trade for the shares that you hold in your Ameritrade account. In order to do so, you will need to follow the procedures outlined below to identify shares for proper tax regulation requirements. When placing the trade online for a "Versus Purchase Trade" after the trade has executed notification must be sent to Ameritrade via: 1. Fax LOI (letter of intent) to the Tax Team 2. E-mail LOI to the Tax Team with the subject as "Versus Purchase Trade" 3. Mail LOI to the Tax Team The LOI must identify the sale - the symbol, the date, number of shares - identify which buy is being matched up with the sale by providing the date of purchase and or transaction number. When placing trades with brokers, you can inform the broker it is a "Versus Purchase Trade". The broker will enter the pertinent information and it will appear on your written trade confirmation. Ameritrade will send you a letter acknowledging the receipt of the LOI. You will need to retain this letter of acknowledgement for tax purposes." | If you place your trade through a live broker, Ameritrade procedures appear to comply exactly with IRS requirements. But if you trade online, the specific identification of shares sold doesn't occur until after the sale, which is not what the IRS wants. |
| CSFBdirect | "The accounting method in place at CSFBdirect is called LIFO (last in, first out). However, you may designate at any time what lot of shares you would like sold using any accounting method you choose. In order to make the designation, just call the Customer Service line and submit your request with an Investment Service Representative or send an email while logged into your account. You will receive a confirmation via regular mail of the versus purchase transaction (i.e. the shares sold versus the shares purchased)." | CSFBdirect may use LIFO, but the IRS expects you to use FIFO, unless you opt for a different method. If you decide to specifically identify your fund shares, the CSFB procedures appear to comply with IRS requirements. |
| Datek | "Datek pools all shares in your portfolio. This means you will not be able to specify individual lots of shares when placing a sell order. Once you sell the shares, you can send an e-mail with the transaction details, including the lot you sold for tax purposes. We will then acknowledge your designation, which serves as your record." | The IRS requires specific identification "at the time of sale," and Datek is unable to oblige ("Once you sell the shares, you can send an e-mail..."). Datek's procedure still might pass muster with the IRS. Then again, it might not. |
| E*Trade | "Selling mutual funds on the shares of your choice will not go automatically in our system. You will have to adjust that in your portfolio or we could do it for you after the sale is made." | E*Trade offers no way to specifically identify at the time of sale, and there's no mention of a written confirmation. Not encouraging. |
| Fidelity | "You may track specific shares on your own account and then request in writing for specific shares to be sold in writing. However, we do not perform the tracking for you. You would need to track the shares in your own books." | The sale procedure is exactly what the IRS wants, but it's not clear if you get a written confirmation. Presumably, you do. |
| Morgan Stanley Online | "All of our mutual funds trades are processed as first in, first out. At this time, no other designations may be made on mutual fund trades." | Short, sweet, and not good news. |
| National Discount Brokers (NDB) | "A sale versus purchase is when you designate(match) a particular sell to a particular buy. You may place a sell versus purchase trade through a live trader. If you place the trade over the website or through powerbroker, you need to call into customer service and specify which sell you want to match against a particular buy. You have to place this request within 90 days of the sell." | NDB gives you up to 90 days to specifically identify the shares sold, which is clearly too long for the IRS. Also, NDB doesn't mention anything about a written confirmation. |
| Quick & Reilly | "If you...want to sell specific shares and designate which ones they are depending on when and at what price you bought them, you can do so by placing the trade on-line and the contacting us at 800-793-8050 where we will enter this designation into the system. You will receive written confirmation of the sale specifying it as a versus sale of specific shares." | Close to what the IRS wants, but not quite. |
| Schwab | "In order to specify specific shares sold from your account, you will need to place your order through a broker at 1-800-435-4000. A confirmation can then be printed, indicating the lot of shares sold versus the purchase." | No provision for written instructions. |
| Siebert | "You may designate the particular shares of a mutual fund or equity that you wish to have sold. Once you have sold the position, you must contact our Customer Service dept. to inform a representative that you wish to provide a "versus purchase" date. A versus purchase will allow us to designate your sale against a particular block position. You will receive a standard confirmation stating that fact." | Like Quick & Reilly, close but no cigar. |
| TD Waterhouse | "We are unable to accept versus purchase orders for mutual funds." | Well, that was easy. |