Overview

When disposing of an asset (e.g., as part of Sell, Trade, or Withdraw Transaction, or a fee), Taxbit will determine the appropriate lot to dispose of based on the disposition method (also known as accounting method, cost basis method) selected. A disposition method can be set on the Filer, Account, or Transaction, outlined below.

Setting Disposition Methods

Filer

A default disposition method must be provided for a Filer. If a disposition method is provided at the account or transaction level, it will take precedence over the Filer default.

Account

A default Disposition Method can be optionally provided for an Account at creation. Additionally, multiple disposition methods over time can be set with the Disposition Methods API, allowing accounts to have disposition methods effective starting at certain dates.

Account-level disposition methods will be leveraged over the disposition method set on the Filer. If a disposition method is provided at transaction level, it will take precedence over the Account level method.

Transaction

A Disposition Method can be provided for a Transaction. This transaction-level setting will override any Account or Filer level Disposition Methods set. Note that Specific Lot Identification can only be set on transactions.