Chapter 30
Tax Rules for Investors in Securities
30.1 Planning Year-End Securities Transactions
30.7 Convertible Stocks and Bonds
30.8 Constructive Sales of Appreciated Financial Positions
30.10 Capital Gain Restricted on Conversion Transactions
30.11 Puts and Calls and Index Options
30.12 Investing in Tax-Exempts
30.13 Ordinary Loss for Small Business Stock (Section 1244)
You have the opportunity to control the taxable year in which to realize gains and losses. Gains and losses are realized when you sell, and if there are no market pressures, you can time sales to your advantage.
If you sell securities at a gain in 2013, and you held the securities more than one year, you can benefit from the 0%,15% or 20% rate for long-term capital gains.
The $3,000 limitation ($1,500 if married filing separately) on deducting capital losses from other types of income is a substantial restriction. If you have capital losses exceeding the $3,000 (or $1,500) limit, it is advisable to realize capital gains income that can be offset by the losses.
30.1 Planning Year-End Securities Transactions
First establish your current gain and loss position for the year. List gains and losses already realized from completed transactions. Then review the records ...
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