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From: west@mormps.dec.com
Newsgroups: net.taxes
Subject: capital gains
Message-ID: <4979@decwrl.DEC.COM>
Date: Sun, 24-Aug-86 21:28:12 EDT
Article-I.D.: decwrl.4979
Posted: Sun Aug 24 21:28:12 1986
Date-Received: Mon, 25-Aug-86 20:08:23 EDT
Sender: daemon@decwrl.DEC.COM
Organization: Digital Equipment Corporation
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The new tax bill raises everyone's capital gains rate  (for people in
the 28% bracket, it doubles it).  LOTS of people made gains in stock,
bond, and mutual fund prices this year.  I'm told it is perfectly
legal to sell a security and immediately buy it back provided you have
made a gain rather than a loss.  Today's world of electronic trading
allows the two transactions to be timed as close as you like. Thus,
anyone can pay this year's capital gains rate rather than next year's
for the cost of 2 trades, and the bid/asked spread (typically 1/4 pt).
Thus, if the difference in your capital gains tax on a given stock is 
in excess of about $100, it pays to do this wash-gain-sale this year.
(The commissions are also deductible as they are calculated into the 
net cost of the stock).

Sounds too easy - did Congress anticipate that a lot of revenue pegged 
for next year may be swapped into this year at 1/2 the amount.  Is 
this truly legal?