Should read losses can be used to offset income at a rate of $3,000, and any remainder used against future gains in entirety, or used to offset income at the $3,000 limit in a given tax year.
Should read losses can be used to offset income at a rate of $3,000, and any remainder used against future gains in entirety, or used to offset income at the $3,000 limit in a given tax year.
Thx. So the tax stategy to profit taking is simply to offset the losses so as to avoid paying as little to the IRS as possible in any given year. Simple enough, but i was also curious if there's more tax strategies worth pursuing.
seattle prattle wrote:
At the risk of scaring you, i thought you could claim up to $3 K in losses in any year, and any more than that could be carried forward to claim in future years.
So, if i have that right, if you can carry the losses forward. You don't have to have profits in the same year to offset them.
Maybe i have that wrong, but would appreciate knowing so if i do.
Thx.
Thanks. That's what I believed also. There was no discussion of losses in the post I quoted.
wondering wrote:
seattle prattle wrote:
At the risk of scaring you, i thought you could claim up to $3 K in losses in any year, and any more than that could be carried forward to claim in future years.
So, if i have that right, if you can carry the losses forward. You don't have to have profits in the same year to offset them.
Maybe i have that wrong, but would appreciate knowing so if i do.
Thx.
Thanks. That's what I believed also. There was no discussion of losses in the post I quoted.
.
Precisely. The bull market devotee claiming he was taking profits is thus left with only one reason to do so.
He thinks the market will soon tank.
Of course he doesn't think that. He was merely engaging in some mindless bragging and backed himself into a corner.
Contribute the max to tax deferred savings plan, IRA, 401k, etc.
In a taxable account, and at a market high, it would be wise to take profits at the top, pay the tax, have cash to deploy. Often times investors avoidance of taxation leads to riding the position below where they started.
Ghost of Igloi wrote:
Contribute the max to tax deferred savings plan, IRA, 401k, etc.
In a taxable account, and at a market high, it would be wise to take profits at the top, pay the tax, have cash to deploy. Often times investors avoidance of taxation leads to riding the position below where they started.
But if you sell the profitable investment and pay the tax, you've just effectively depleted your investment reserves by the amount of the tax. And that is not to mention that it is very difficult, if not impossible to know if a market high is really just a step on the way to a much higher market.
I've had good luck letting my winners ride, and imagine i may pass them along to the next generation, which triggers some distinct tax advantages all its own.
Ghost of Igloi wrote:
Contribute the max to tax deferred savings plan, IRA, 401k, etc.
In a taxable account, and at a market high, it would be wise to take profits at the top, pay the tax, have cash to deploy. Often times investors avoidance of taxation leads to riding the position below where they started.
Maybe. There are a lot of variables to consider.
OK, of course it depends on the investment, your individual situation. If you were worried about selling GE a year ago because of the taxable gains, but sell it a year later for a loss, what was the smarter decision? As always there are multiple options and neither is a certainty. And at current valuations it is highly likely raising cash (not all), paying the tax, is a wise decision.
Another thing to consider in support of cashing out and paying the tax: some of the leveraged ETFs which are very popular these days have high operating costs that come with them. It's tempting to take the profit and stop paying out that ongoing cost, but the taxes are so steep since they've run up so much, it's a tough pill to swallow.
So, yes, there's a lot of things to consider and weigh the advantages/disadvantages to each.
If you have bullish leveraged ETFs or a short volatility ETFs that would certainly a wise move. At this point you are pushing on a string, and that string is a leveraged one.
Ghost of Igloi wrote:
And at current valuations it is highly likely raising cash (not all), paying the tax, is a wise decision.
Maybe.
wondering wrote:
Ghost of Igloi wrote:
And at current valuations it is highly likely raising cash (not all), paying the tax, is a wise decision.
Maybe.
"Highly likely" is speculative and opinionated. As such, it is highly likely to be incorrect.
It is always a question of probabilities, risk versus reward. Most are attracted to the greed side ignoring the risk, which is obvious, but discounted. And when the opportunities are most slanted in one’s favor, the perception of risk is often greatest, but is not.
Mayfield wrote:
wondering wrote:
Maybe.
"Highly likely" is speculative and opinionated. As such, it is highly likely to be incorrect.
Considering metrics most correlated to future returns “highly likely” is a factual representation.
Ghost of Igloi wrote:
Mayfield wrote:
"Highly likely" is speculative and opinionated. As such, it is highly likely to be incorrect.
Considering metrics most correlated to future returns “highly likely” is a factual representation.
Please present your metrics.
You can start here:
A good place to start if you are actually interested is the Office of Financial Reasearch, Department of Treasury publication “Quicksilver Markets.” The Office of Financial Research was created after the last financial crisis through the Dodd-Frank Bill.
https://www.financialresearch.gov/briefs/files/OFRbr-2015-02-quicksilver-markets.pdf
Ghost of Igloi wrote:
You can start here:
https://mobile.twitter.com/hussmanjp?lang=en
Not a metric.
Ghost of Igloi wrote:
A good place to start if you are actually interested is the Office of Financial Reasearch, Department of Treasury publication “Quicksilver Markets.” The Office of Financial Research was created after the last financial crisis through the Dodd-Frank Bill.
https://www.financialresearch.gov/briefs/files/OFRbr-2015-02-quicksilver-markets.pdf
Same as above.
Ghost of Igloi wrote:
A good place to start if you are actually interested is the Office of Financial Reasearch, Department of Treasury publication “Quicksilver Markets.” The Office of Financial Research was created after the last financial crisis through the Dodd-Frank Bill.
https://www.financialresearch.gov/briefs/files/OFRbr-2015-02-quicksilver-markets.pdf
I used this link and it told me that market stress levels are below average and the lowest they’ve been in about 10 years. Isn’t that bullish?