The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: Re: Is this legal?||Date: 9/2/2001 4:11 PM|
|Author: kmckenzie||Number: 53773 of 124835|
I was thinking of employing the following strategy.
I buy, say $5000 of ATTT. It goes up 20% in the first year, to $6000. I sell $5000 worth of it and report a cost-basis of 5000 -- no
cap gain. We'll assume it stays up. I hold the remaining until the 18-month minimum has elapses. I sell this for $1000 or so, and report
a cost basis of zero, so I pay the long-term rate on the $1000 profit.
Is this comprehensible? Legal? Brilliant?
That's not how things work. Cost basis is determined on a share/fractional share basis, not lot basis.
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