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Author: PuddinHead42 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121477  
Subject: Cap Gains loophole? Date: 12/25/2007 5:23 PM
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Ok, this may be silly, but humor me instead of flaming me. If someone found a mutual fund with a large cap gain payout coming (at end of a year) and they bought the fund, then they would get this payout and have to pay 15% cap gains on it that year. But, the payout causes the fund price to drop by an equivalent amount, so could you sell the fund (immediately or 31 days later) and also take a short term loss? So if you already had net ST gains to be paid at your marginal rate, you are then converting them to LT gains. Right?

I know people should not make decisions just for tax purposes, but the end game is to make money, so would this work? No need to call me stupid, just a nice logical critique. Thanks.

P.
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