Identified Shares

Identified Shares - Identified shares are those that have been recognized, being either stocks or mutual funds, as sold on a given date for a specific price. This is significant when taxes are involved. In order minimize tax liability a given investor who is selling shares must identify what priced they were when bought in order to determine his or her cost basis. Should they have been purchased over a long periods at varied prices then it is necessary to resort to a plan such as a Constant Dollar Plan or Dividend Reinvestment Plan to determine the correct price. This is necessary to obtain the lowest capital gains tax possible.