RESEARCH PROBLEM

$($from South$-$Western Federal Taxation$)$

Issue: Can Marcy use the specific identification method to determine her basis in

stock shares sold or must she use first in$,$ first out $($FIFO$)$ because her broker did not

provide written confirmation of which shares were sold?

$($Locate the most appropriate I.R$.$S$.,$ court, and$/$or I.R$.$C$.$ guidance. Likely, a Treasury

Regulation and a Tax Court Memorandum decision are the most appropriate authority

for this particular Research Problem. Of course, a court case may be the most

appropriate authority when it interprets, for example, a Treasury Regulation and has

similar facts to the facts of the taxpayer in this Tax Research Problem.$)$

Facts:

Marcy sold shares of stock through her broker. The shares sold and retained had

various different cost bases for the calculation of gain as amount realized minus basis.

Marcy would like to specifically identify which shares have been sold from her

allotment to thus possibly use shares with higher bases to achieve less gain. Marcy$$s

broker did not provide a written confirmation of which shares were actually sold. Marcy

had a standing oral instruction to the broker to sell the stock with the highest bases.