Lot Relief Method

It's basically prunes, pushing, or an enema for giant blocks or lots of stock you want to sell.

Lot Relief Method refers to techniques used to calculate the cost basis of a lot (group) of shares, which is then used to pick out which of your lots to sell off first. The cost basis is the original cost or purchase price of the asset, and will determine what tax will be charged upon the sale.

There are multiple ways to calculate the cost basis of the lot, and depending on which is used, the tax due on the sale will vary. Two methods go in purchase order: Last In, First Out sells the last shares that were purchased first. The First In, First Out Method sells shares in the order they were purchased (the first to be bought and brought into the portfolio are the first to be sold).

The Dollar Value LIFO (Last In, First Out) groups shares by performance. Average Cost uses, well, the average of a whole group of assets or lots. Lastly, the Specific ID method lets the investor identify the shares they want.

As you may have noticed, the names are pretty clear cut, but choosing the method is less so. It's based partly on the rules applying to that asset, the method used to calculate previously, and the anticipated performance of that share in the future.