Message Font: Serif | Sans-Serif
No. of Recommendations: 0
Find a security that isn't an MLP that has a very high dividend yield, that you think has fundamental value (close to book or below) and that you don't think is going to go that far down. In the current climate, a REIT or REIT-alike may do (AGNC, AI, NLY.) Buy it before ex-dividend. Take your distribution, which (in the case of a REIT) will be taxed like regular income anyway. Sell the stock right after ex-dividend: it invariably generates a loss-that-isn't-quite-a-loss (because you were paid the dividend) in the days following. You get the dividend, the stock dives as it always does after ex-dividend, and you also get credit for the capital loss. Reinvest the money in a different REIT, or whatever great investment idea you happen to be entertaining. Repeat endlessly. $Profit.

I used to think this was possible. I checked dividend paying stock after dividend paying stock. Never did I find a buy or a sell time. I suggest you do what I did. Go back over the past year or so and check out the stocks at dividend time. Where would you place the buy and sell? Would you just put the order in at market? There's no telling a what price it would cost or sell for. Limit orders, no idea if it would even trigger.

Here's the NLY chart. Where and when would you have place the buy and sell orders and at what price? Remember Hindsight is 20/20.

Do it on paper for a bit to see if it works.

That said. I wouldn't buy or sell a stock because of taxes...loss or gain. I certainly wouldn't for a loss.
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.