FIFO is the default accounting method used by the IRS for most taxpayers, unless another method is chosen prior to the sale of a security.  FIFO cost basis method assumes the first shares you sell are matched with the first shares you purchased.  LIFO assumes the first shares you sell are matched with the shares you purchased last.  IBKR allows you to change the tax basis on your account but defaults to FIFO for assets sold from your account.  See FAQ: How often may I change the tax basis method on my account?

In compliance with Treasury Department Circular 230, unless stated to the contrary, any information contained in this FAQ was not intended or written to be used and cannot be used for the purpose of avoiding tax penalties that may be imposed on any taxpayer.

Yes.  At calendar year-end, IBKR provides a Gain/Loss Summary Worksheet showing trade gain and loss detail for all securities (stocks, options, single stock futures and bonds) for the year. The summary worksheet is available by logging in to Client Portal and accessing the Reports > Tax menu. 

Transactions are split into two parts: Short-Term Capital Gains and Losses, and Long-Term Capital Gains and Losses.  All attempts have been made to tie total proceeds shown on this worksheet to your Form 1099-B total proceeds, however discrepancies may exist.  Proceeds are reported net of all commissions.  Gains and losses are calculated using First In, First Out (FIFO), Last In, Last Out (LIFO) or a Maximize Losses (ML) methodology, whichever method has been selected by the user for a particular trade.

We suggest that you review this summary worksheet carefully and verify its contents.  Please consult your tax advisor if you have any questions regarding tax reporting.

In compliance with Treasury Department Circular 230, unless stated to the contrary, any information contained in this FAQ was not intended or written to be used and cannot be used for the purpose of avoiding tax penalties that may be imposed on any taxpayer.

In compliance with Treasury Department Circular 230, unless stated to the contrary, any information contained in this FAQ was not intended or written to be used and cannot be used for the purpose of avoiding tax penalties that may be imposed on any taxpayer.

An unrealized profit or loss (also known as a paper profit or loss) occurs when a security increases or decreases in value above (profit) or below (loss) the price paid for that security.  A realized profit or loss occurs when you sell the security. The difference between the price at which the security was purchased and the price at which the security was sold is the realized profit or loss.

For regulated futures contracts, realized profit and loss is the actual aggregate profit or loss recognized over the course of the year from transactions in commodity futures and currency futures contracts on a mark-to-market basis, and is reported in box 13 of Form 1099-B for noncovered securities.

Refer to IRS Publication 550, Investment Income and Expenses, and Publication 551, Basis of Assets for details on reporting gains and losses, including determining cost basis. Additional information is provided in the instructions to IRS Form 6781 and the Instructions to Schedule D (and Form 8949).  Consult your tax advisor for further guidance.

In compliance with Treasury Department Circular 230, unless stated to the contrary, any information contained in this FAQ was not intended or written to be used and cannot be used for the purpose of avoiding tax penalties that may be imposed on any taxpayer.