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Posted by alex on October 7, 2008, 6:10 pm
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With the market as such I have some losses I plan to book before the
end of the year. I also plan to ofsett the losses with gains I have
with other stocks. These are the Questions:
1. If I sell the stock that has cap gains and buy the same right back,
will IRS accept the transaction as a cap gain transaction, or are
there any "wash sale rules" or such for gains?
2. Is there any other way to just move up the basis of the stock, pay
cap gain tax for the difference and use the paper gain to ofsett the
other losses? Actualy I am looking to see if there is a way "bok" the
gain without messing with the game of buying/selling it?
Any good ideas are appreciated.
Tkx, Alex
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Posted by Phil Marti on October 7, 2008, 6:36 pm
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"alex" wrote:
> With the market as such I have some losses I plan to book before the
> end of the year. I also plan to ofsett the losses with gains I have
> with other stocks. These are the Questions:
>
> 1. If I sell the stock that has cap gains and buy the same right back,
> will IRS accept the transaction as a cap gain transaction, or are
> there any "wash sale rules" or such for gains?
In order, yes and no. While this may seem a great idea on the surface,
scratch a tad below before you decide to just willy-nilly reset basis and
holding period. You don't mention how much paper loss you're planning on
recognizing. Remember that you can apply $3,000 to ordinary income, which
is taxed at a higher rate than long-term cap gains. Hold your winners long
enough and your heirs can inherit them tax-free.
Also, don't let the tax tail wag the investment dog. Are you selling
because these are stinkers that no longer belong in your portfolio or just
to harvest tax losses? What you might be looking at, from an investment
perspective, is an opportunity to buy cheap rather than an opportunity to
recognize losses.
>
> 2. Is there any other way to just move up the basis of the stock, pay
> cap gain tax for the difference and use the paper gain to ofsett the
> other losses? Actualy I am looking to see if there is a way "bok" the
> gain without messing with the game of buying/selling it?
No
--
Phil Marti
Clarksburg, MD
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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. >>
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<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
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<< Copyright (2007) - All rights reserved. >>
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Posted by jack on October 8, 2008, 12:06 am
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> Remember that you can apply $3,000 to ordinary income, which
> is taxed at a higher rate than long-term cap gains.
Lets say I have 150,000 in interest and dividends, and a lot of capital
losses.
I also have some very hefty deductions, so I am well into AMT.
Do I still get to apply the $3,000 to ordinary income, or is that lost into
the black hole of AMT?
--
<< ------------------------------------------------------- >>
<< 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. >>
<< ------------------------------------------------------- >>
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Posted by Arthur Kamlet on October 8, 2008, 12:19 am
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>
>> Remember that you can apply $3,000 to ordinary income, which
>> is taxed at a higher rate than long-term cap gains.
>
>Lets say I have 150,000 in interest and dividends, and a lot of capital
>losses.
>I also have some very hefty deductions, so I am well into AMT.
>Do I still get to apply the $3,000 to ordinary income, or is that lost into
>the black hole of AMT?
In some tricky situations, such as selling stock acquired through
ISO exercise or sale of depreciated property that flows to
schedule D, you might have a different Schedule D for regular
tax than for AMT.
But you have not told us anything that would hint there are
going to be different Schedules D needed.
So assuming you will use the same schedule D for regular tax and
AMT, you will apply the same ($3000) to form 1040 line 13, and
no schedule D adjustment on the AMT Form 6251.
--
ArtKamlet at a o l dot c o m Columbus OH K2PZH
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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. >>
<< ------------------------------------------------------- >>
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Posted by alex on October 8, 2008, 12:38 pm
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> > Remember that you can apply $3,000 to ordinary income, which
> > is taxed at a higher rate than long-term cap gains.
>
> Lets say I have 150,000 in interest and dividends, and a lot of capital
> losses.
> I also have some very hefty deductions, so I am well into AMT.
> Do I still get to apply the $3,000 to ordinary income, or is that lost into
> the black hole of AMT?
Thanks for the reply. Following is additional background:
1. The unrealized losses are more than 300,000 and the unrealized
gains (short and very few long) are double than the losses. I can
"save" enough of them to use the 3000 against ordinary income.
2. The cap gains are mostly in one stock that was distributed to me as
zero basis and can not be stepped up if is an inheritence
distribution.
Would the added info change anything?
--
<< ------------------------------------------------------- >>
<< 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. >>
<< ------------------------------------------------------- >>
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