Stop Listening To This Tip!
Every December, USA Today, CNN, Washington Post, etc gather their brains to come up with year end tax tips.
Fondly enough, they are the same ones every year, but there is one in particular that bugs the living crap out of me!
That is, sell stocks that are losing money.
This is bad advice for two reasons:
1.) Just because a stock is losing money at the time, you could be holding it long term and it’s just having a dip
2.) They make it seem like you can take the entire loss as a deduction and that’s not always the case.
You see, you are limited to $3,000 per year in net capital losses. Therefore, if you sell a stock and get a $9,000 loss, you have to take that over 3 years. Not all at once.
Most people only realize about a $300-$400 tax reduction for a $3,000 deduction.
Sell a stock when it makes sense for your portfolio goals, not for a tax benefit!
For more great tax advice and home based business tax help CLICK HERE
Cheers
Steve
