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Author: mto01 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 27843  
Subject: Re: Drips and Taxes Date: 8/26/1999 4:46 PM
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Thanks for the link to the tax information - it was helpful. However, one more question. Here's an excerpt from the article:

7.23 FOOL__VAR-L_____8/6/98__429.36___237.08____201.16
8.96 FOOL__VAR-S_____8/6/98__532.09___408.87____134.24

When selling a block of shares acquired on different dates, use VAR-L for long-term various dates and VAR-S for short term various dates. We prorated the selling commission to $4.44 for long term (7.23/16.19 = .446 or 44.6%) and $5.51 for the short term holdings (8.96/16.19 = .553 or 55.3%). The initial buying commission was for long term only, as it correlates only with the initial share purchase.

He lost me when he started talking about prorating selling commision. How did the Gains for the Long Term shares come out to 201.26 ? Wouldn't it have been 429.36-237.08=192.28 ? Where's the 8.88 I'm missing in my calculation? The same goes for the short term gains he came up with, I came up with 532.09-408.87=123.22.

I noticed the difference between his numbers and mine comes out to 2x the selling commisions of 4.44 and 5.51 respectively. Why? Where'd the 2x come from? And what's up with prorating the selling commision? Why would the selling commission (something that was a loss to me) be considered a capital gain?

Sorry to bug you, new this stuff...

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