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Every share you buy creates a lot: a unit of cost basis that follows that share around until it’s sold. Lot accounting is what makes the difference between “you sold some Apple, here’s your gain” and “you sold these specific shares bought on this date at this price, here’s your gain and your remaining basis.”

This page covers how Wealthfolio’s lot tracking works, why we made the choices we did, and what to expect when activities touch your lots.

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1 · The mental model

Think of each BUY as opening a numbered lot:

Lot #1:  2024-01-10  20 shares @ $150.00 cost basis = $3,000
Lot #2:  2024-04-15  10 shares @ $180.00 cost basis = $1,800
Lot #3:  2024-08-22   5 shares @ $200.00 cost basis = $1,000
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Total:               35 shares                       $5,800
Average cost:                                        $165.71

The average cost line is a convenience display — total cost basis of your open lots divided by the shares you hold. It is not a moving-average accounting method: Wealthfolio doesn’t keep a running moving-average price, and the figure simply re-derives from whatever lots are still open. (See the note for moving-average jurisdictions below.)

Lots only exist when you track real activities. A manually-entered holding (a manual account snapshot) stores just a quantity and the average cost you type in — there’s no per-lot history behind it, so FIFO and realized-gain tracking only kick in once the position is built from actual BUY / SELL / TRANSFER activities.

Every SELL or TRANSFER_OUT closes shares from one or more lots. Wealthfolio decides which lots to close using a method called FIFO.

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2 · FIFO: first in, first out

Wealthfolio closes the oldest lot first. Sell 25 shares from the position above and you’ll close all of Lot #1 (20 shares) plus 5 shares from Lot #2:

Sell 25 shares @ $195

Closed:
  Lot #1: 20 shares × ($195 - $150) = $900 realized gain
  Lot #2:  5 shares × ($195 - $180) = $75 realized gain

Realized gain total: $975

Remaining:
  Lot #2:  5 shares  @ $180   = $900 cost basis
  Lot #3:  5 shares  @ $200   = $1,000 cost basis
  Total:  10 shares                   $1,900

Why FIFO?

• Defensible. It’s the default cost-basis method in most jurisdictions, so your Wealthfolio numbers will tend to match what your broker reports for tax purposes.
• Simple to reason about. No “which lots am I selling?” guessing. The oldest go first, period.
• Stable. Adding a backdated trade doesn’t reshuffle which shares were “sold” in later sales unless the backdate is actually earlier than those sales.

Selling more than you hold? Wealthfolio doesn’t go negative or open a short lot. It closes every available lot, caps the position at zero, and flags the oversell — short positions aren’t supported today. If you see this, you’re usually missing a BUY or a TRANSFER_IN that should have come first.

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3 · How activities change lots

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4 · Worked example: BUY → SPLIT → SELL

You buy, the stock splits, you sell. What does each activity do to your basis?

2024-01-10   BUY 10 @ $400
   Lot #1: 10 shares, cost $400/share, total cost $4,000

2024-06-01   SPLIT 4-for-1
   Lot #1: 40 shares, cost $100/share, total cost $4,000

2024-09-15   SELL 25 @ $120
   Closes 25 shares from Lot #1
   Cost basis closed: 25 × $100 = $2,500
   Proceeds:          25 × $120 = $3,000
   Realized gain:                  $500

   Remaining Lot #1: 15 shares, cost $100/share, total cost $1,500

Notice that the SPLIT didn’t realize a gain; it just rebalanced the lot. The realized gain on the SELL uses the post-split per-share cost.

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5 · Transfers preserve cost basis

When you move shares between two Wealthfolio accounts:

Account A (Brokerage)        Account B (Roth IRA — *don't actually do this*)

Lot:  100 shares @ $150      —

         ↓ TRANSFER_OUT 50 shares

Lot:   50 shares @ $150      Lot: 50 shares @ $150
                             (received via TRANSFER_IN)

Both halves of the lot share the original cost basis. Wealthfolio doesn’t realize a gain; moving shares isn’t selling them.

For transfers from external accounts (not another Wealthfolio account), a standalone TRANSFER_IN opens a single new lot at whatever cost basis you provide. Set it to your broker’s “transferred-in basis” if you have it, or to the average cost as of the transfer date.

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6 · DRIP and dividend-in-kind

A DIVIDEND with the DRIP subtype does two things in one activity:

1. Records the dividend income at the cash amount.
2. Opens a new lot for the reinvested shares at the DRIP price.

That new lot starts the FIFO clock on those shares from the DRIP date. Relevant for short-vs-long-term capital gains tax in some jurisdictions.

A DIVIDEND in Kind (e.g. a spin-off) opens a lot in the new security at the cost basis your broker reports. The original lots in the parent security are unchanged.

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7 · Fractional shares

Lots are tracked to 8 decimal places. DRIP fractions, crypto satoshis, and broker fractional-share programs are all first-class.

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8 · Cost basis and currency

Each lot’s cost basis is stored in the asset’s own currency. A lot of a USD-listed stock carries a USD cost basis; a EUR-listed stock carries EUR — regardless of your account’s base currency. If you enter a trade in a different currency than the asset, Wealthfolio converts it at the trade’s FX rate and remembers the rate it used.

What matters for tax: when you sell, the realized gain reported in your base currency is built from two different FX rates —

• Cost basis is converted at the acquisition-date rate.
• Proceeds are converted at the disposal-date rate.

Buy  10 shares @ $100   when 1 EUR = 1.10 USD  → basis  €909
Sell 10 shares @ $100   when 1 EUR = 1.00 USD  → proceeds €1,000

Realized gain (EUR): €91  — even though the price in USD never moved.

In other words, currency movement is folded into your realized gain, not broken out separately. The share price can be flat in its local currency and you’ll still show a gain or loss in your base currency from the FX swing. This is the standard treatment in most jurisdictions, but it’s worth knowing before you reconcile against a broker statement denominated in the asset’s currency.

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9 · Why not LIFO, weighted-average, or specific-identification?

FIFO is opinionated by design — but it’s the starting point, not the end state. Additional cost-basis methods will be added in future versions. The most-requested alternatives on the roadmap:

• LIFO (last in, first out): common in certain US tax strategies. Not implemented yet; planned for a future version.
• Weighted-average / moving-average cost (WAC — called ACB in Canada, gleitender Durchschnittspreis in Austria/Germany): several jurisdictions require a moving average rather than FIFO. Canada uses ACB by default; Austria taxes realized gains on a moving average. The “average cost” shown on a holding is not this method — it’s a display figure derived from your open FIFO lots, so after a partial sale it reflects the remaining lots rather than a running moving average. Until WAC ships, your Wealthfolio realized-gain numbers will diverge from a moving-average tax calculation, so you’ll need to reconcile manually in the meantime.
• Specific identification: picking which lots to close on each sale. Powerful for tax-loss harvesting, but adds a lot of UI complexity. Planned.

The honest answer: we’d rather ship FIFO well first and add the other methods in later versions than ship three half-finished accounting modes at once. Vote on what should come next in GitHub Discussions.

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10 · Where to see your lots

Open any holding from the Holdings page. The asset detail view has a Lots tab that shows every open lot, its purchase date, original cost, and current unrealized gain/loss.

The same view powers the realized vs. unrealized breakdown on the Performance page.

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Next step: Performance Metrics walks through how realized and unrealized gains combine into the TWR and MWR numbers on your dashboard.

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