ACATS Cost Basis Transfer: Tax Lot Carryover Defense
PROOF LOG #001
ACATS Cost Basis Transfer: Tax Lot Carryover Defense
When the account moves, the tax-lot path still needs to remain reviewable.
2023-02-01
$20,000 Basis
The original purchase remains the source of truth for the final sale.
Basis: $0
The asset arrives, but the transfer row can read like a new lot.
An ACATS transfer is generally not a taxable sale.
Cost basis, tax lots, acquisition dates, and holding periods should carry over, but broker records may arrive incomplete, reset, or difficult to reconcile.
This proof shows how FDL reconnects the prepared original lot to the final sale so the carryover can be reviewed instead of assumed.
WATCH THE RECONSTRUCTION
Watch the transfer artifact being neutralized and the sale being re-attached to the original lot.
- Original purchase: 100 TSLA on 2023-02-01 at $200
- Transfer-in artifact shows 2025-01-15 with $0 basis
- If the ACATS error remains, the sale can read as a $25,000 short-term gain
- The operator silences the artifact and matches the sale through Target Lot ID
- Tax Report and Audit Trail reflect the prepared correction
- Final result: $20,000 basis / $5,000 gain / LONG
EXECUTIVE PROOF
1099-B / Transfer View
- transfer-in record may appear as a new lot
- basis may appear as $0
- acquisition date may appear reset
- term may appear short-term
- the reviewer is left reconstructing history manually
FDL Prepared Record
- original lot remains the source truth
- sale is matched to TSLA-20230201-01
- cost basis is carried into Tax Report
- original acquisition date remains reviewable
- Audit Trail preserves the consumed source lot
PHASE 1 — THE ARTIFACT
A transfer-in row can look like a new purchase even when nothing new was acquired.
In this case, the working file showed:
- Date2025-01-15
- Basis$0
- Position100 TSLA
- Effectthe sale can read as a short-term zero-basis disposition
What moved was the asset.
What broke was the record.
PHASE 2 — THE CONTROLLED CORRECTION
FDL Pro does not guess across brokers.
The operator performs a controlled correction:
- SilenceThe zero-basis transfer row is removed from tax-lot computation and retained only as a memo record.
- MatchThe sale is linked to TSLA-20230201-01 through Target Lot ID.
- Run Audit pushes the prepared correction through Tax Report and Audit Trail.
This is not automatic ACATS repair.
It is a controlled, reviewable correction.
FORENSIC EVIDENCE
What must remain intact
- Original acquisition dateThe transfer must not become a new purchase.
- Basis continuityThe original $20,000 basis must remain connected to the sale.
- Lot identityThe final disposition must remain tied to TSLA-20230201-01.
What FDL makes legible
- TransactionsShows the artifact being silenced and the sale being matched.
- Tax ReportShows the corrected result.
- Audit TrailShows the consumed source lot and final close.
This is the point of the white-box architecture:
the correction is visible, not implied.
WHY THIS CASE MATTERS
ACATS is not a taxable event.
It should not create a new tax history.
When basis disappears and the acquisition date resets, the same sale can read radically differently.
Broken transfer view: $25,000 SHORT gain.
Prepared record: $5,000 LONG gain.
This is not tax alpha.
This is truth restoration.
WHAT FDL IS SHOWING HERE
FDL Pro is not creating a new answer.
It is executing a prepared correction to a broken transfer record.
The value is not in guessing.
The value is in making the correction:
- explicit
- deterministic
- reviewable
- traceable to the lot level
CHOOSE YOUR NEXT STEP
FDL — deterministic tax infrastructure for prepared, in-scope records.