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Financial Planning / Tax Strategies


Subject:  Re: Tax Loss Selling Date:  10/1/2013  4:04 PM
Author:  TMFPMarti Number:  119236 of 127637

I took a heavy loss on stock X.

I will sell stocks y and z from my MDP at an equally heavy gain offset said gain. I'll then immediately repurchase the same MDP stocks.

Is this a short-sighted approach?

To me it seems there's an inconsistency between your Subject and your "I took..." statement. Is this a realized loss or one you're contemplating? If the latter, I think taxes are a lousy reason for selling a stock that's down. The question should be whether the stock still meets your criteria for buying it and whether you have a better place to deploy what you could get for it today.

If you've already sold, yes this is short-sighted. Why not just use the loss at $3,000 per year against ordinary income instead of ginning up long-term (I assume) cap gains to eat it up right away? The loss isn't going anywhere, and it will still be there when your investment strategy tells you to sell a winner.

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