Considerations
Every time you purchase a new stock, you create another holding/position in your portfolio. If you sell the shares in one of these positions, you exit the position. The sell transaction results in either a capital gain or capital loss.
However, the process becomes more complicated if you have multiple lots of the same security. A "lot" is created when you instruct your brokerage to purchase a security. For example, you used your online broker to purchase 100 shares of MSFT on 1/4/02, you created a lot in MSFT. Then on 3/1/02 you purchase 50 shares of MSFT, without selling your original lot of MSFT created on 1/4/02. Now you have two lots of MSFT. Since these two lots were purchased at different times and probably at different prices, you must record the lots separately for accurate capital gain/loss determination. Even if you purchase two lots on the same day (and even with the same price) you must track these lots separately for tax reporting.
For example:
Buy 1/4/02 100 shares of MSFT
Buy 3/1/02 50 shares of MSFT
Sell by one of the following: