If you ignore taxes, In the end is using FIFO or LIFO the same?
If two people buy and then later sell several batches of the same stock at different prices over time, and:
one person tracks their profits using first-in-first-out (FIFO) accounting
the other person tracks using last-in-first-out (LIFO) accounting
all the buys and sells are for the same number of stocks at the same prices for the two people, the only difference is how they calculate the gains
Would they always come up with the same loss/gain in the end after all batches are sold?
Nothing to do with tax, just purely a math question. I'm just trying to figure out if how you track the lots as you sell the shares ever matters in the end. My gut feel is that it will always be the same in the end, but not sure how to prove it to myself for all cases.
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Yes, the key thing is when all shares are sold, the total gains would be the same. It’s only the sales along the way that have different gains at the moment of the sale.
The difference is only important when considering taxes. But I think you knew that.
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