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Financial Planning / Tax Strategies


Subject:  Re: MF sales-what method to choose? Foreign tax Date:  2/9/2009  1:06 AM
Author:  vkg Number:  104377 of 127745

Since you sold your entire holdings, the total loss will be the same, regardless of whether you use average cost per share or individual transactions. It is possible that the percentage allocated to short term losses might be different using average versus individual transactions.

Allocating losses to short term instead of long term is only an advantage if you have short term capital gains to offset the losses. Up to $3,000 of capital losses can be applied against regular income each year. Short term losses are allocated against regular income before long term losses.

So, it won't hurt to use the method that applies the most loss to short term, but don't be surprised if it doesn't reduce your taxes.

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