Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP
Path: utzoo!mnetor!seismo!lll-crg!lll-lcc!well!mandel
From: mandel@well.UUCP (Thomas F. Mandel)
Newsgroups: net.taxes
Subject: Re: capital gains
Message-ID: <1682@well.UUCP>
Date: Wed, 27-Aug-86 02:35:01 EDT
Article-I.D.: well.1682
Posted: Wed Aug 27 02:35:01 1986
Date-Received: Wed, 27-Aug-86 11:54:39 EDT
References: <4979@decwrl.DEC.COM>
Reply-To: mandel@well.UUCP (Thomas F. Mandel)
Organization: Whole Earth Lectronic Link, Sausalito CA
Lines: 22
Summary: Not necessarily sensible to take gains in 1986

In article <4979@decwrl.DEC.COM> west@mormps.dec.com writes:
>The new tax bill raises everyone's capital gains rate  (for people in
>the 28% bracket, it doubles it). ...
>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.
>...


It doesn't necessarily make sense to sell a long-term position, pay
capital gains tax at this year's lower rate, and re-buy the same
stock.  The exception is a stock for which you expect very substantial
*future* appreciation.  In some instances, it makes greater sense
to hold the stock.  For instance, if your current long-term capital
gains tax would be 14%, and you expect future appreciation in excess of
about 150%, hold the stock.  (The relevant variables in such an
analysis are your current bracket and the amount of gain already
received.)

		Tom Mandel

		...!well!mandel
		mandel@sri-kl.arpa