What cost basis method should I choose – FIFO or specific identification?

Cost basis is what you paid for shares, and the method you pick determines which shares are "sold" first, which changes your taxable gain. By default brokers use FIFO (first-in, first-out), selling your oldest shares first – often the ones with the lowest cost basis and biggest gain, which maximizes your tax. Specific identification (SpecID) lets you instead pick exactly which lots to sell, so you can choose high-basis shares to minimize gains, or harvest losses on lots that are underwater. SpecID gives you the most control and is almost always worth using. The catch: you must designate the lots at or before the time of sale, in writing through your brokerage, not at tax time. Set your default lot-selection method to specific ID in your account settings so you're not stuck with FIFO.