The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: Re: Managing Year-End Capital Losses||Date: 12/17/2001 9:44 PM|
|Author: TrevorJ||Number: 56089 of 124795|
Thanks, David, Peter, and Lokicious for your thoughtful replies. Here's my conclusion on the subject of taking year-end losses:
1. It makes sense under certain circumstances to offset gains for the tax year by taking losses up to the limit of the $3,000 offsetable against income each year.
2. It needs to be done by either selling stocks which you want to dump anyway, or managing a swap with similar, but not substantialy identical, stock (so as to avoid a wash sale), yet maintain portfolio balance.
3. The benefit of the latter may be relatively small, since you will have a lower basis in any replacement stock, which will eventually catch up with you.
4. Beyond the $3,000 there is absolutely NO benefit in creating a loss to carry forward to future years, unless you specifically want to get out of your position anyway.
My intention now is to do nothing, since I have (unfortunately) already more than offset my gains for the year!
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