Key Takeaways The last-in, first-out (LIFO) method assumes that the last unit to arrive in inventory is sold first. The first-in, first-out (FIFO) method assumes that the oldest unit of inventory is ...

Selling mutual funds? Choose the right cost basis method to manage taxes efficiently and maximize your gains. Explore strategies to prevent unexpected taxable events.

FIFO indicates first in first out which means the mutual fund units bought first are sold first. Based on this phenomenon, capital gains tax is computed.