Beauty of tax loss selling in this market

[blazespinnaker]

Anyone looking at this?

One of the things with tax loss selling, at least in canada, is that you can't sell/re-buy and asset and claim the tax loss. You have to wait 60 days before doing so.

But I believe that the way this market has gone down, is you can simply sell one asset, and then just purchase a very high correlating similar asset, and then claim the tax loss immediately (as long as you don't rebuy that other asset).

Tax loss selling can be pretty useful, especially for longer term investors who have had capital gains, because you can invest the tax rebate or wait for more favorable tax regimes.

ie, the market dropsy isn't all that bad.

[BiscayneSunrise]

Re: Beauty of tax loss selling in this market

In the US, the rule is that an investor must wait 30 days.

There is one loophole, though. I'm not a CPA and I'm a little fuzzy on this but my best recollection is that it goes like this: If you own a stock at a loss, let's say 100 shares. You can buy an additional 100 shares at the lower price, then sell the first 100 shares, take the tax loss and still be holding this original investment.

In this market, though, where the general trend is down there is really no need to go long again into the original investment any time soon.

[blazespinnaker]

Re: Beauty of tax loss selling in this market

In the US, the rule is that an investor must wait 30 days.

There is one loophole, though. I'm not a CPA and I'm a little fuzzy on this but my best recollection is that it goes like this: If you own a stock at a loss, let's say 100 shares. You can buy an additional 100 shares at the lower price, then sell the first 100 shares, take the tax loss and still be holding this original investment.

In this market, though, where the general trend is down there is really no need to go long again into the original investment any time soon.

Depends on the investment. Certainly a lot of gold investors around here might not want to stay out for too long.

[nathanhulick]

Re: Beauty of tax loss selling in this market

In the US, the rule is that an investor must wait 30 days.

There is one loophole, though. I'm not a CPA and I'm a little fuzzy on this but my best recollection is that it goes like this: If you own a stock at a loss, let's say 100 shares. You can buy an additional 100 shares at the lower price, then sell the first 100 shares, take the tax loss and still be holding this original investment.

Thats called a wash sale. Its not a loophole.

https://www.gainskeeper.com/glossary_WashSales.html