Selling stock? This tiny choice can swing your tax

Most brokerages sell your oldest shares by default. That invisible setting can cost you thousands in taxes.

Here’s a simple scenario: You need $20K for house downpayment, so you log in and sell 100 shares. Done.

What most people don’t realize: by default, your brokerage likely sells your oldest, cheapest shares. That choice matters for taxes.

Example:

I hold 300 shares of Amazon (current price $210).

If I let the brokerage sell my oldest lot(bought at $180) → $3,000 capital gain → ~$900 tax bill (30% rate).

If I instead specify a different lot(bought at $230) → $2,000 loss → can offset gains or income → ~$600 tax savings.

Same 100 shares sold. A $1,500 swing in taxes.

This isn’t about trading strategies. It’s just about being intentional with which tax lots you sell. Most investors don’t even know they have that choice.

I only discovered this last year, and it surprised me enough that I built a tool, ProfiTree- to help track and optimize these decisions.

Curious if others here have run into the same issue. Do you actively choose tax lots when selling, or just let the default ride?