Ask Rande 10,000+
- TonyFromGlendale
- Kirk
- Karin_
- Rande
- Jonathon
- Kirk
- Thruhiker
- Kirk
- Thruhiker
- Rande
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» TonyFromGlendale - Capital gains and losses
Greetings Rande...I have a long term capital gain in real estate for this year. My CPA suggested some stock selling to get losses to apply agains't this gain.
Do the stock losses need to be long term losses to apply to the long term gain? Do short term stock sale losses fit in here anywhere? I tried to call my CPA this a.m. in Pasadena but she is spending 10 days in Hawaii and I suspect her cell phone is too full of beach sand to be able to respond.
Thanks from Glendale!
-- posted by TonyFromGlendale
» Kirk - Re: Capital gains and losses
In response to message posted by TonyFromGlendale:You can use short term capital losses to offset long term capital gains (as long as you pay attention to the wash sale rules). It just benefits you to use short term losses to offset short term gains more due to the higher rate.
-- posted by Kirk
» Rande - Just checking in.
Just checking in....(long day)Wash sale and IRA -- Conservative position says reacquiring stock in an IRA within thirty days violates wash sale rule. Some practitioners say no, but I'm not aware of anything in the Code, Regs, legislative history or judicial interpretations that would provide an IRA exception to the wash sale rule. But, in the final analysis, it is a voluntary system.
Netting cap gains -- Like kind against like kind first, then long can offset short and vice versa. Always nice to offset short term with long term in an ideal world, but any tax saved is good.
"Ordinary income tax" -- Wages, interest income, dividend income, distributions from retirement accounts, pensions, etc. are taxed at the "ordinary" marginal income tax rates. Capital gains from the sale of capital assets are taxed at the preferential capital gain tax rates.
Back this weekend, and it's a good thing too. Left my heart in San Francisco and it's hard to get along without it. 
-- posted by Rande
» Thruhiker - Re: deadline?
In response to message posted by Jonathon:jonathon, kirk has it backwards.
if you have a stock that you want to maintain a position in AND take a loss you need to BUY today (doubling up you position) and SELL on 12/31 to avoid the wash provisions.
if you BUY after today you can not sell until next year without triggering the wash rules.
this means that if (for example) you have 100 shares of MSFT to sell that if you buy today you will have 200 shares for a month. depending upon what the market does in december this could be good or bad.
if you do not want to double up you can always sell anytime this year...just don't rebuy for 31 days.
-- posted by Thruhiker
» Kirk - Re: Re: deadline?
In response to message posted by Thruhiker:Why is a buy different than a sell?
The doubling up should have nothing to do with it other than it allows you to maintain a position in the company (just hope it isn't going down like Enron did...)
Some people don't like to double up.
I've actually thought some stocks might hit their minimum at the end of the year as most just sell on the last few days to get their tax losses. AMAT and LRCX hit really good bottoms last yr on the last few days where they quickly recovered.
<img src=http://cbs.marketwatch.com/charts/int-ad... width=452 height=366>
I often think it is better to sell in Nov for the tax loss and then buy back at the end of Dec if you want to play some "games" trying to get the best price.
Anyway, my point is I don't believe there is any difference between selling or buying just you need to wait 30 days to avoid a wash sale.
You are correct that most probably double up by today then sell the shares for a loss on Dec 31. We might even see a price spike in BOWG today from this.
http://quote.yahoo.com/q?s=BOWG.OB&d=c&k...
My "play" this year is to have a few bucks to see if I can get any tax loss bargains that last week.
(though I plan to be skiing for a couple days..)
-- posted by Kirk
» Rande - Re: Re: Re: Re: deadline?
In response to message posted by Thruhiker:Thru's got it right -- you can sell at any time between now and the last trading day of the year to take the loss this year, only you'll have to wait 31 days to repurchase the same security. If you don't want to be out of the position for even a day, today is the last day you can "double up," wait 31 days to sell the original position and still get the loss this year. Another alternative is to sell and then buy a similar, but not substantially identical replacement and then wait 31 days to get back into your original position. You can do that any time between now and the end of the year. Today's deadline only has to do with doubling up in the same position.h
-- posted by Rande
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