Most fund companies and brokerages, including Charles Schwab, Salomon Smith Barney, Vanguard Group, T. Rowe Price and Invesco, routinely provide a year-end calculation of gains or losses using the average cost method. Some brokerage statements list detailed purchase information to make it easier for you to use any of these methods. The average-cost method determines how much you paid for all of your fund shares over time, and divides the total by the number of shares you own. Your capital gain or loss on any fund shares sold would be the difference between the price of the shares when sold and the per-share average cost. This method will almost never yield the absolute best tax results.
Specific identification is.
But if you can't use specific identification and your choice is between FIFO or average cost, then average cost may work to your advantage when selling shares of a fund that has delivered significant gains since you first invested. Average cost, double category Like average cost, single category, this method takes your total cost and divides by the number of shares owned.