It's just how you do the accounting. For instance, you might buy a stock over time, and then sell it over time as the price is rising. You have to pay tax on those gains, but how you do it is a choice. You can do first-in-first-out, so the gains would be e.g. on the first 5 shares you bought vs. the first 5 you sold. You can also do first-in-last-out, which might make sense if you can get long-term capital gains rates on some trades.
It's kind of ridiculous, but most traders will have some sort of automated solution to help with it. The exchange you use should give you a nice report of your trades.
It's kind of ridiculous, but most traders will have some sort of automated solution to help with it. The exchange you use should give you a nice report of your trades.