The Motley Fool Discussion Boards

Previous Page

Financial Planning / Tax Strategies


Subject:  Re: capital gains Date:  4/4/2000  10:12 PM
Author:  TMFTaxes Number:  33523 of 131280

<<<<1. the tax...purchase the new investment>>
Since the time between my sell/new purchase and April 17 was 6 mos, I've invested the cash that I now could use to pay the tax. Do people actually set aside their estimated tax payment when they sell, or cash in poor performers when April 15 rolls around?>>

Well...unless you fall under the "safe harbor", you really need to "pay as you go" in order to avoid penalties. So it's not only the tax due on April 15th that's at issue. I think that you should visit the Taxes FAQ area and read more about estimated taxes. It'll tell you how to sail into the safe harbor and how estimated taxes work.

<<<<But...if you believed in the company...REALLY believed in the wouldn't have had the stop loss in place at all, right? >>
I was trying to follow O'Neill's(IBD paper) rule about putting in stops, moving them up as the stock appreciates, cutting losses and letting winners run...>>

Which is fine, but it's not Foolish. I think what you want to do is look at all of the pros and cons of any investment technique and stick with it. Surely the people who promote the stop loss theory told you what could happen, didn't they? And it did. And that's the problem with screwing around with stop least IMHO.

<<This is one of the very reasons that the Fool HATES stop losses, and doesn't use 'em. Neither do I. If I have what I believe is a good, strong, long-term company, I won't need a stop loss... But I'm always looking at least 5 years down the line. What happens today, this month, or even this year is of very little importance to me...especially when it has to do only with stock PRICE and not the value of the company.>>
I often have a hard time telling what is a good, strong, long-term company if ones doesn't use price performance as a guide. How can one figure value of the company, without stock price as confirmation? BTW, the company I was speaking of was 3COM.>>

Well, now you're getting out of the area of taxes and into the guts of Foolish investing. So I'll have to leave you here and point you to the Fools School for more information. I've got a deal with the Gardners: they don't give tax advice and I don't give investment advice. :-)

Good luck in your Foolish education.

TMF Taxes

Copyright 1996-2020 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us