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Posted by Barry Margolin on March 19, 2007, 2:23 am
Please log in for more thread options >> You can use them forever at 3K per year to offset income.
>> There was some talk of congress COLA indexing this 3K, or
>> increasing it for retirees who have different income
>> conditions.
>>
>> If you ever start investing again you can buy "unrealized
>> gains" in mutual funds in the future to cut taxes. I've
>> done some of that myself. You find unrealized gains in
>> previews of year-end distributions or growth stocks inside
>> prospectii (e.g. lots of GOOG).
> How does that help? Suppose I buy a mutual fund for $1,000
> of which $200 is unrealized gains. They realize it, and pay
> me $200 in capital gains. That offsets $200 of capital
> loss; but my shares in the fund are now worth only $800, so
> I have the same loss if I sell them (and if I don't sell
> them, and wait for the $800 to appreciate back to $1,000, I
> might just as well have bought $800 worth of any other
> mutual fund and waited for it to appreciate.)
The benefit is that you don't have to pay tax on the
distributed gain, because it just eats away at the huge
carryover you have.
Basically, if you have so much carryover that you'll never
use it up, you essentially never have to pay capital gains
tax again. Which means that you can ignore them when making
investment decisions.
--
Barry Margolin, barmar@alum.mit.edu
Arlington, MA
*** PLEASE don't copy me on replies, I'll read them in the group ***
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