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I was trying to find the answers to cap gains strategies for end of year tax selling, and through various sites I got a better understanding and then came up with these ideas. I would appreciate comments and feedback to see if I am full of it ;-)

ST gains are taxed at you marginal rate, LT gains at 15%. For this discussion I will assume you make enough so your marginal rate is 25% or higher.

If your situation is:

ST Gain + LT Gain : Offset the ST gain to $0 by taking some short term losses to reduce taxes at your marginal rate. (Avoid cutting into your LT gains with ST losses, but remember, net gains also increase AGI, so reducing total net gains may help reduce possible AMT issues).

ST Loss + LT Gain : Net LT gain taxed at 15%, so it may not be good to take more ST losses. But, take some ST Gains to reduce ST net to $0 so it does not offset the favored LT Gains @15%.

ST Gain + LT loss : Take either more LT losses or ST losses to reduce ST Gains taxed at higher marginal rates.

ST Loss + LT Loss : If losses are less than $3000, you can take more LT losses (or ST losses) to reduce taxes at higher marginal rate.

Any net loss of more then $3000 gets carried over, so no need to go out of your way to sell and take more than that in one year.

These are simple, basic strategies, I am sure there are lots of longer term complicated ways to plan.
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