Buying more..., page-9

Peter,

I think you will find that e-trade do this because the ASX suggests a default policy of FIFO (first-in-first-out) on the taxing of shares by default: i.e. the first you bought are the first you sold. As do most tax accountants, apparently.

See here for an example discussion: http://www.thebull.com.au/premium/a/17812-how-to-calculate-your-share-gains-and-losses-for-tax.html

As pointed out:
- In other cases, the Commissioner will accept your selection of the identity of shares disposed of, and
- In limited circumstances, the Tax Office will also accept an average cost method to determine the cost of the shares disposed of.

However the problem is it's unclear what "other cases", and "limited circumstances" are.

Obviously you could explore this in more detail with the tax office, but the easy answer if you don't want to is to assume if you adopt FIFO and get audited then you won't have an issue.