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I cashed in my first gains today a 40% profit. I have only owned it since Oct.2006 though.

1) Will I have to pay a higher tax on it since I have not owned it for more than a year?
2) If so, what will be the rate?
3) I have some losing stock that has a weak outlook. Can I sell it to offset the gains taxes?

Any suggestions are appreciated.

AE
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sorry, because you owned it for less than a year your gain will be taxed as ordinary income (along with salary, etc).

Yes you can sell stock gains to offset the short term gain, even long term gains.
ed
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Did you mean sell my losses to offset the gains?
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Since no one else has answered, Yes, I'm about 99% certain he meant sell your losses to offset your gains.

The losses do not have to be short-term losses to offset short-term gains, since you eventually offset total gains against total losses before putting the final number on your Schedule D.

Kasha
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Sorry "Yes you can sell stock gains to offset the short term gain, even long term gains".


Yes I meant sell your losses to offset short term gains, particularly if they are long term losses so they won't offset long term gains in the future. By selling now you lose a potential 15% loss (or offset of other LTCGs) but you decrease ordinary income taxed 25% or more.

Conversely, don't purposly sell losses to offset LONG TERM gains as that precludes a potential advantage explained above.

ed
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