FIFO Method Stocks – Worked Example
FIFO is the mandatory order for every sale of stocks, ETFs or funds. BubbleTax applies it automatically across your entire IBKR history.
When you sell, the tax office asks: which exact shares? § 20 Abs. 4 Satz 7 EStG gives the binding answer: First In, First Out. The first acquired lots count as sold first. From that comes the acquisition cost, from that the gain or loss.
- 1.Buy 1: 100 shares AAPL01.01.2024, per share€50.00
- 2.Buy 2: 100 shares AAPL01.06.2024, per share€70.00
- 3.Sell: 100 shares AAPL01.12.2024, per share€80.00
- 4.Acquisition cost (FIFO)100 × buy 1 (€50), not buy 2€5,000.00
- =→ Capital gain100 × (€80 − €50), Anlage KAP line 19€3,000.00
How the gain in line 19 emerges
Per security, BubbleTax builds a FIFO stack from your purchases and pulls the oldest lots first on every sale.
- 01
All purchases per security are sorted chronologically. Splits, spin-offs and transfers adjust quantity and cost basis.
- 02
On every sale, the oldest available lots are pulled first, with their actual acquisition cost at the ECB rate of the purchase day.
- 03
Sale proceeds minus FIFO acquisition cost yields the gain or loss per trade, both in euros.
- 04
Aggregated per tax year: stocks, ETFs, bonds separately. BubbleTax reports the amounts in the correct KAP lines.
The stock-loss bucket: why FIFO especially hurts on stocks
§ 20 Abs. 6 Satz 4 EStG keeps a separate bucket only for stocks. Stock losses can offset only stock gains, never dividends, interest or option income. FIFO decides whether a sale lands in that bucket or not.
Stock gains and losses are tracked in an isolated bucket. A loss on AAPL cannot offset dividends from MSFT.
FIFO determines the cost basis per sale. If you sell after a crash, your recently bought lots, the tax office still believes you sold the oldest ones.
Carried-forward stock losses sit in the bucket until you realize stock gains again. Until then, they stay unused.
BubbleTax reports stock P&L separately in line 20, so you don't accidentally mix the bucket with other losses.
§ 20 Abs. 4 Satz 7 EStG: „In determining the gain, the assets acquired first are deemed to be sold first." This order is binding, other methods (LIFO, weighted average) are not accepted by the tax office. The FIFO requirement applies per custody account, that is, per security type and per account. BubbleTax applies the rule automatically across the entire available IBKR history.