And there's no reason why they couldn't be. A country can have a simple system of capital gains taxes if it wants one. The last time I checked the Web site of Congress's Joint Economic Committee, several nations including Hong Kong, Belgium and Mexico had no capital gains taxes at all on equity investments. The United States has a complicated system of fund taxes because we prefer it that way. Otherwise, in our representative democracy, we would put pressure on our legislators to scrap the complicated system and replace it with a simple one.
Methods Let's get back to cases.
Where last year is concerned, it's too late for wool-gathering about how things ought to be. If you wanted to use method A, you should have specified which shares you were selling at the time of the transaction. Otherwise, make a mental note to consider this in the future, the first time you sell shares of some other fund. Method C, the FIFO system in which you deem the shares sold to be the ones you bought first, may result in a big tax bill if, as often happens in bull markets, the net asset value per share has been rising steadily over time. So method B may be the easiest course.