I have used the FIFO method to determine the cost basis for a sale of a portion of a mutual fund holding. Must I continue to use this method for all future sales of this fund?

No. If you subsequently sell some shares in that mutual fund and can identify the shares sold, you can switch to the specific share identification method. Both of these methods are cost basis methods.

To switch to an average basis method, you must have acquired the shares at various times and prices, and left the shares on deposit in an account handled by a custodian or agent who acquires or redeems those shares. Once you elect to use an average basis, you must continue to use it for all accounts in the same fund. However, you may use a different method for shares in other funds, even those within the same family of funds.

Before using an average basis, be sure your records reflect the disposition of the shares that were reported using the cost basis method (FIFO). More.

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