Cost basis of shares sold	Taxable capital gain	Tax on gain
Average	$4,000 (100 shares x $40)	$6,000 ($10,000 – $4,000)	$900 ($6,000 x 15%)
FIFO	$1,000 (100 shares x $10)	$9,000 ($10,000 – $1,000)	$1,350 ($9,000 x 15%)
LIFO	$6,500 (100 shares x $65)	$3,500 ($10,000 – $6,500)	$840 ($3,500 x 24%)
Low cost	$1,000 (100 shares x $10)	$9,000 ($10,000 – $1,000)	$1,350 ($9,000 x 15%)
High cost	$6,500 (100 shares x $65)	$3,500 ($10,000 – $6,500)	$840 ($3,500 x 24%)
Tax Lot Optimizer	$6,000 (100 shares x $60)	$4,000 ($10,000 – $6,000)	$600 ($4,000 x 15%)
Specified lot	$6,000 (100 shares x $60)	$4,000 ($10,000 – $6,000)	$600 ($4,000 x 15%)

Disclosure Title

Source

Schwab Center for Financial Research. The example is hypothetical and provided for illustrative purposes only.