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EveryoneGetsATrophy
LSU Fan
Member since Nov 2017
1419 posts

Tax-Loss Harvesting
Anyone familiar with this. My CPA called and mentioned that I might want to sell my XOM stock and use the loss toward my tax return, meanwhile using the funds that are left to buy stocks that have been pummeled now.
This post was edited on 4/1 at 8:36 am


TJG210
LSU Fan
New Orleans
Member since Aug 2006
26440 posts
 Online 

re: Tax-Loss Harvesting
Yes, but selling what should be a long term hold with a great dividend sounds like a dumb way to accomplish this, especially in April. My advice, get a new CPA.


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Tadey
LSU Fan
Baton Rouge
Member since Aug 2012
341 posts

re: Tax-Loss Harvesting
You can't sell and write off the loss then buy them right back. What you can do is sell, write off the loss, and then put the same money in another solid oil company like chevron right away.


EveryoneGetsATrophy
LSU Fan
Member since Nov 2017
1419 posts

re: Tax-Loss Harvesting
quote:

You can't sell and write off the loss then buy them right back. What you can do is sell, write off the loss, and then put the same money in another solid oil company like chevron right away.


This was his exact recommendation. Said XOM has been under performing for years.


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cave canem
Mississippi St. Fan
pullarius dominus
Member since Oct 2012
11421 posts

re: Tax-Loss Harvesting
I use SPDR ETF's for this, as long as the fund name is different you can buy essentially the same thing right back at same price and write off the loss.

Not sure I would do this with XOM for CVT right now though, but who am I to judge.

Remember there is a cap on losses you can write off, make sure it is worth it to you after fees.


Janky
LSU Fan
Team Primo
Member since Jun 2011
32206 posts

re: Tax-Loss Harvesting
Unless something has recently changed you can only offset $3,000 of income with tax losses.


b-rab2
LSU Fan
N. Louisiana
Member since Dec 2005
11910 posts
 Online 

re: Tax-Loss Harvesting
quote:

offset $3,000 of income with tax losse


I have yearsssss of that write off

They really should up that to like $5000/year


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10
Tadey
LSU Fan
Baton Rouge
Member since Aug 2012
341 posts

re: Tax-Loss Harvesting
If I'm not mistaken you can roll over whatever you can't use this year. Someone else will have to verify that.


Janky
LSU Fan
Team Primo
Member since Jun 2011
32206 posts

re: Tax-Loss Harvesting
Yes, capital losses are on the books until completely used. You can use them against an infinite amount of capital gains in any one year, or up to $3,000 of income in any one year. I hope that makes sense.


fjlee90
LSU Fan
Baton Rouge
Member since Nov 2016
3317 posts
 Online 

re: Tax-Loss Harvesting
quote:

$3,000 of income in any one year.


So if I were to have 6k in losses I am allowed to offset 3k of income in year 1 and year 2, theoretically?

Or do I apply 3k to income and the remainder are required to offset capital gains?


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Janky
LSU Fan
Team Primo
Member since Jun 2011
32206 posts

re: Tax-Loss Harvesting
quote:

So if I were to have 6k in losses I am allowed to offset 3k of income in year 1 and year 2, theoretically?


Correct

quote:

Or do I apply 3k to income and the remainder are required to offset capital gains?


They can be used however you see fit, just no more than $3,000/year against income.


fjlee90
LSU Fan
Baton Rouge
Member since Nov 2016
3317 posts
 Online 

re: Tax-Loss Harvesting
quote:

Janky




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ArkBengal
LSU Fan
Benton, AR
Member since Aug 2004
1433 posts

re: Tax-Loss Harvesting
Or if you feel good about XOM, you can sell then wait 30 days then buy back I believe. 30 days is the “wash sale” provision


SalE
LSU Fan
At the beach
Member since Jan 2020
226 posts
 Online 

re: Tax-Loss Harvesting
IRS Code 475(f)...changing your accounting method to mark-to-market..then IRS Form 3115


EveryoneGetsATrophy
LSU Fan
Member since Nov 2017
1419 posts

re: Tax-Loss Harvesting
Thanks for the replies except for 1. Thinking about buying maybe some Chevron, JP Morgan and Spirit Airlines.


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LSUFanHouston
LSU Fan
NOLA
Member since Jul 2009
20918 posts
 Online 

re: Tax-Loss Harvesting
quote:

Anyone familiar with this. My CPA called and mentioned that I might want to sell my XOM stock and use the loss toward my tax return, meanwhile using the funds that are left to buy stocks that have been pummeled now.


Did you have some tremendous realized gains in Jan-Feb of this year, before the market went to crap?

Selling low stocks in order to get losses to offset gains recongized elsewhere in your portfolio is a time-honored tax strategy. But usually we want until later in the year to recommend that.

I would think XOM stock will come back at some point, so unless you need the loss for some reason, seems silly to sell now.

(Note: this is not financial advice in regards to whether XOM is a good investment or not).


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LSUFanHouston
LSU Fan
NOLA
Member since Jul 2009
20918 posts
 Online 

re: Tax-Loss Harvesting
quote:

IRS Code 475(f)...changing your accounting method to mark-to-market..then IRS Form 3115


Whew... ok, that's a HUGE step that is completely inappropriate for the vast majority of people.

quote:

Special rules apply if you are a trader in securities in the business of buying and selling securities for your own account. To be engaged in business as a trader in securities, you must meet all the following conditions.

You must seek to profit from daily market movements in the prices of securities and not from dividends, interest, or capital appreciation.
Your activity must be substantial.
You must carry on the activity with continuity and regularity.
The following facts and circumstances should be considered in determining if your activity is a securities trading business.

Typical holding periods for securities bought and sold.
The frequency and dollar amount of your trades during the year.
The extent to which you pursue the activity to produce income for a livelihood.
The amount of time you devote to the activity.
If your trading activities do not meet the above definition of a business, you are considered an investor, and not a trader. It does not matter whether you call yourself a trader or a “day trader.”


You have S/E taxes and potential for large phantom income issues.


SalE
LSU Fan
At the beach
Member since Jan 2020
226 posts
 Online 

re: Tax-Loss Harvesting
I am in the market trading everyday..already have this cleared.


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Keys Open Doors
Duke Fan
In hiding with Tupac & XXXTentacion
Member since Dec 2008
28129 posts

re: Tax-Loss Harvesting
You can also buy back on Day 31 after the sale, I believe.


Janky
LSU Fan
Team Primo
Member since Jun 2011
32206 posts

re: Tax-Loss Harvesting
Yes


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