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Case Study 3: Long-Term or Short-TermMarie bought 100 shares of Antrim Corporation stock for $2,000. A year later, she bought another 100 shares of Antrim for $2,300. Five years later, Marie sold 100 shares of Antrim for $3,000, but she did not identify the specific block at the time of sale. What is the adjusted basis of the stock that Marie sold? Click here for an explanation. If a taxpayer does not identify the specific block at the time of sale, shares sold are treated as coming from the earliest block purchased. Because Marie purchased the earliest block of shares for $2,000, the adjusted basis of the shares she sold was $2,000. The sales price of the shares she sold was $3,000, so Marie had a long-term capital gain of $1,000. However, if Marie had told her broker to sell the 100 shares from the second block of stock she bought, the adjusted basis of the shares sold would have been $2,300, reducing her profit (and any taxable amount) on the sale to just $700. 
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Income — Capital Gain or Loss Workout
Holding Period
Publication 4491 Capital Gain or Loss Income