In Australia, the ATO allows an investor, in certain cases, to choose the specific buy parcels used for calculating capital gains tax (CGT).
This is also referred to as the 'Specific Identification method'.
Navexa allows you to specify parcels manually. This gives you full control over your capital gains tax reporting.
Setting up manual parcels
In order to set up the parcels for a holding, follow these instructions:
Navigate to the holding you want to set a specific buy allocation for, and select the 'Trades' tab.
The trades tab for the holding IVV
Click on the sell trade (1) you want to set up. More options will expand underneath (2).
Click the 'Add new parcel' (A) button to create your first manual parcel selection.
B: Select the buy trade from the dropdown to indicate which buy trade parcel you are selling.
C: Enter the quantity of this buy trade that you wish to sell.
D: Click the green tick button to save the record.
The record will look like this once saved:
Congratulations! You have set up your first manual parcel.
Getting the tax result
Now, when you run the 'Capital gains tax report', these parcels will take precedent over the portfolio and holdings tax settings.
So, if the portfolio tax setting is FIFO and you create a manual parcel, the manual parcel will be used first.
The remainder will have the FIFO strategy applied to it.