Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 61-97

1961-1 C.B. 394

Sec. 1012

Full Text

Rev. Rul. 61-97

Where shares of stock, which were purchased in different lots on different dates and left in the custody of a broker or other agent, are directed to be sold, an adequate identification is made, under section 1.1012-1(c) of the Income Tax Regulations, if the owner (1) specifies to the agent in writing the sequence in which he desires the shares to be sold, (2) identifies the shares to be sold either by their purchase date, cost, or both, and (3) receives a written confirmation of the specification from the agent. Stock identified in this manner is the stock sold or transferred even though stock certificates from a different lot are delivered to the transferee. This method of identification of shares is equally applicable to sales made pursuant to a systematic plan of liquidation provided the owner's instructions to the broker or other agent clearly identify the order to be followed in disposing of stock acquired in different lots, even though the liquidation is conducted over a long period but subject to a single order. The average price per share may not be used as the basis for the purpose of computing gains or losses upon sales of the shares.