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Subject:  Re: Taking a Long Term Capital Gain Date:  12/11/2007  8:46 AM
Author:  billjam Number:  97164 of 127617

<<<If I sell a stock this week which produces a long term capital gain on my 2007 taxes, are there any tax ramifications if I repurchase the same stock the next day (other than establishing a new basis)?
Not much. But why do it?

You're picking up a taxable gain, and converting a long-term position to a short-term position. Your holding period for the new shares will start when you buy them.

Do you qualify for the 5% rate this year, so as to jack up your basis by paying minimal tax? If you stay in a low bracket, the gain will be 0 in 2008.>>>

No problem if you have a gain. You can repurchase immediately.

Among the reasons to do this now and raise basis are being quite confident you'll jump from the 5% tax bracket to the 15% bracket on cap gains in future years. Also, in my case I'll be on partially taxed SS next year. Every $ of cap gains will make more of my SS taxable at regular tax rate. My spreadsheet shows the effect of this is my '08 cap gains will be taxed at nearly 10% effectively even though the cap gains themselves will be taxed at 0%.
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