Just want to check my understanding on this since it sounds too good to be true. Let's say I have the following shares of a specific stock:
- 10 shares purchased at ¥10,000 on 2022/01/01
- 10 shares purchased at ¥20,000 on 2023/01/01
Now if the current price is ¥30,000 and I want to sell 10 shares, the average cost basis will be ¥15,000, so the gain would be (¥30,000 – ¥15,000) * 10 = ¥150,000. According to this comment, FIFO tells you which shares are sold, so now I'm left with only the 10 shares purchased on 2023/01/01.
Next year, I decide I want to sell the remaining shares (still at ¥30,000 per share). The average cost basis would be ¥20,000, so the gain would be (¥30,000 – ¥20,000) * 10 = ¥100,000.
In total, I would pay taxes on gains of ¥250,000. Is this correct? I'm surprised because in the US, you would select specific shares (and cost basis) to sell, which would result in a total gain of (¥30,000 – ¥10,000) * 10 + (¥30,000 – ¥20,000) * 10 = ¥300,000 (obviously converted to USD, which comes with FX fluctuations, etc).
Another detail to note is that the calculation changes if you sell all 20 shares at the same time (which would result in gains of ¥300,000, just like in the US method). I wonder if this means you could simply make the 2 transactions a day apart from each other to get this tax benefit, or if there is some rule that would treat the sales as if they happened together.
Thanks in advance!
by kitsunegi