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View Full Version : Short term loss and long term gain


kevinwarf
Dec 27, 2011, 05:55 PM
In 2011 I have a 6310 Long term gain and a (5170) short term loss. Would it be best for me to sell more stock to increase my short term loss so I can take advantage of a $3000 write off?

MukatA
Dec 27, 2011, 07:49 PM
May be yes, if you have income in high tax bracket.

ebaines
Dec 28, 2011, 06:27 AM
It can be worthwhile to cull your losses at the end of the year to reduce the tax bite. However, presumably you made these investments for a reason, and so if your investment goals haven't changed think about rolling the proceeds from the sale into another investment that fits your investment strategy. Remember, you can't buy back the same stock or mutual fund that your are selling for a loss within 30 days - otherwise "short sale" rules apply. So either wait 30 days to buy back the same stock you are selling, or invest in a different but similar vehicle. For example if you are selling an S&P 500 index fund you can immediately reinvest in a different S&P 500 index fund - perhaps one run by a different firm. This way you book a paper loss for tax reasons but stay on course with your investment plans.