FinTech News
Robinhood Introduces Tax Lots Feature for Selling Assets
Robinhood is adding a new feature that will give customers greater control when it comes time to sell their shares.
About Tax Lots:
Today, Robinhood announced the launch of Tax Lots. With this feature, traders will be able to better manage their tax liabilities by gaining control over how their shares are sold.
Using Tax Lots, customers will have more options for selling assets. For example, if a user has 100 shares of stock that were purchased in two transactions and at two different prices, they’d be able to specify which of these shares they want to sell. Prior to this update, Robinhood operated on a “first in, first out” (FIFO) basis. This means that, when customers sold shares, their longest-held shares would be offloaded by default.
With the new feature, traders will have much greater control over which shares are sold. Some of the available options include choosing the longest-held shares, those with the highest or lowest cost basis, and more. As Robinhood notes, these decisions could have an impact on how users are taxed for their trades.
In a blog post, Robinhood stated the new Tax Lots feature would begin rolling out today (December 2nd) and would become available to all users “in the coming weeks.” The feature can be accessed when users make a trade in the Robinhood app.
What they’re saying:
Commenting on the introduction of Tax Lots and what it means for customers, Robinhood’s Chief Brokerage Officer Steve Quirk stated, “At Robinhood, we are committed to making sure investors of all levels have the tools and resources needed to manage their investments. With Tax Lots now available on Robinhood, customers can make informed decisions with their portfolio.”
My thoughts:
For most customers (myself included), this new Tax Lots feature is likely a minor update that won’t really impact their Robinhood trading experience. However, as the platform continues to court more advanced investors, adding these types of abilities is key. For these current or prospective customers, having the ability to specify which shares they want to sell could be crucial to their investing strategy and, thus, this feature may well be a game-changer. That’s why we’ve also seen the roll-out of Robinhood Legend — a desktop trading interface with a customizable dashboard and advanced chart access — as well as other new additions such as index options, futures, and event contracts as it looks to grow its base.
I should also mention that, back in March, Robinhood teased a completely overhauled app. Seeing as the service is introducing all of these new features, I sincerely hope that this update is coming soon.
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