On Oct 27, 4:04*pm, Rich Carreiro <rlc-n...[at]rlcarr.com> wrote:
- quote -

Rich,

Your position was raised by Advisor B also. I can only add some
details of my current situation, but it's not helping me arrive at a
direction. Maybe it will ring some bells with you.

I'm already on SSDI, not working, and losing my LTD policy in January
when I turn 65, so ordinary income is going to come down, not go
up.

My current portfolio has taken a gigantic hit, and there are precious
few securitites that have any profit at all. Advisor A did not, IMO,
invest me wisely, irrespective of the global market decline, and none
of his stock funds, or stock unit trusts have been in positive
territory for more than about 10 minutes in the last 7 years. (His
plan [balanced growth and income] sounded great at the time, and I
knew I had no plan). A separate account that I have had at Fidelity
is entirely in stock mutual funds held for decades. They were fine for
years (not great, but acceptable), and now are either at losses or
minimal gain. I have lost just about all my confidence in
investing, either with advisors (aka brokers) or by myself and have
little optimism that I am going to see such a recovery of my portfolio
that I would have a gain of any magnitude in a finite period of
time. Sorry for the pessimism but poor health and a diminishing nest
egg combine to keep me from seeing the future as very bright. It
makes me lean towards taking advantage of a known tax strategy now
instead of carrying it forward for an indeterminate # of years into an
unpredictable scenario.

One detail I do have to take care of is carefully anticipating capital
gain distributions from all of the stock funds. I don't know whether
people redeeming shares out of panic about the market increases or
decreases the size of CG distributions, but some of my losses will be
used up to cover whatever the latter amount to. If I want to do this
move purely by the current numbers, I should really wait until I have
a very close estimate of both gains and losses for the year, and
that's a fine line to walk. And of course by then, who knows if i'll
have any gain left to shelter :{

I appreciate your insights. I am trying to be as rational as I can,
but am not feeling rational or objective about my investments. It also
doesn't help to have two financial advisors give me conflicting
information.

Thanks,

jo

jo

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Rich Carreiro wrote:
- quote -

an individual who has already maxed out their capital loss
deduction for the year would want to sell stock to create a gain
to offset losses that can be used in the future. If you think the
stock will continue to drop in price and you still want to own
it, buy a Put.

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Rich Carreiro wrote:
- quote -

And the OP's sale/purchase was to capture a gain, not loss, so wash sale
did not apply.

Joe

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"removeps-groups[at]yahoo.com" <removeps-groups[at]yahoo.com> writes:

- quote -

That is somewhat reasonable. But IIRC the original poster was talking
about selling and immediately repurchasing.

--
Rich Carreiro rlc-news[at]rlcarr.com

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On Oct 27, 1:04 pm, Rich Carreiro <rlc-n...[at]rlcarr.com> wrote:

- quote -

It sounds reasonable. If you have a stock that is dwindling in value
and you think it will fall further, but will be good for the long
term, you can sell it now and take your profits (which here will be
used to offset other losses so there will be no tax due), then use
that money to buy the shares back at a lower price.

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jo <phillysleuth[at]verizon.net> writes:

- quote -

[snip]

- quote -

The moderator is of course correct, but I question the entire
premise of the transaction.

If you don't actually want to be rid of the stock, why do you
want to realize the gain and needlessly burn up loss? Remember,
a capital loss is itself an asset, since it shields future gains
and can offset up to $3000 of ordinary income. So why needlessly
consume an asset?

Why not leave the stock alone and have a bigger loss carryover
which will allow you to offset a future gain on the sale of some
stock that you DON'T want to keep?

--
Rich Carreiro rlc-news[at]rlcarr.com

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I and Advisor A have been discussing selling a stock in which i have
quite a bit (but dwindling daily) profit over many years. The timing
would be such that the gain would be shielded by the large losses I
have incurred in the market this year and a carryover from last year.
The next step, because I would like to continue to have this stock in
my portfolio (it is one of the few that there seems to be general
agreement that it is a good core holding long term), is to buy it
back. Advisor A says that because it was sold to offset losses in
other securities, I must treat it as a wash sale and wait the 30 odd
days before buying it back.

Advisor B says that by selling the stock at a gain, the wash sale rule
does not apply and that I could buy it back any time I want to, even
the next day. I'm positive I explained my motives for selling, but
it's possible she didn't remember.

I have searched the web and only find the standard explanations for
wash sales involving selling a security at a loss and buying it back
before the 30 day period, not selling it at a gain to offset losses in
one or more other securities. Can anyone help me understand the
treatment of this?

Thanks,

jo

========================================= MODERATOR'S COMMENT:
You and adviser B are right. A Wash sale requires a sale at a loss.

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >