Dec 27 2007
Last Chance to Plan for 2007 Capital Gain Taxes
Today and tomorrow is the last days to sell losing investments because you can deduct taxes from it. In the US, we are taxed on net capital gains for the year, which means that we should sell stocks that we have a capital lost in to offset all the capital gains, minimizing taxes. The government encourages this in fact, because not only can we balance it just right so we don’t pay ANY taxes for stocks we made money on, we can even get tax credit for a realized capital loss! Let me illustrate in the following example of what I mean.
Say in 2007, I bought $7,000 worth of Diamond Offshore (DO) and $15,000 worth of ETrade (ETFC). Now, DO is worth $15,000 so I decided to sell it, making $8,000 on the investment. However, ETFC is only worth $3,000. If I don’t sell ETrade, it means that I will [...]
Original post by MoneyNing