The indication at sale, through a procedure required by your brokerage firm and the IRS, that you want to sell specific shares (e.g. highest- or lowest-cost shares). Within a reasonable time after the sale, you also need to receive a trade confirmation identifying the tax lot sold. Unless you identify the shares no later than the settlement date, the earliest shares purchased, such as those from a stock option exercise or ESPP, are considered the first ones sold for calculating your gain or loss on the sale (i.e. first in, first out).

For more on this topic, see the related FAQ.