The Homa Files

We’ve been on this theme for awhile … now the WSJ is reporting: Tax threat Prompts Selloff

Investors Dumping Winning Stocks Due to Expected Jump in Capital-Gains Rate

The prospect of higher taxes on capital gains is prompting many to unload some of their winning stocks.

Tax-induced selling is one factor some market watchers attribute to the recent declines.

“Tax rates are going up, and if you don’t plan to hold these stocks for a long time, now is the time to take advantage of the lower tax rates”

What we’ve said that the WSJ doesn’t say:

1. Folks with gains may also find it advantageous to sell winners and immediately buy them back … paying the 15% cap gains tax … and re-pricing at a higher cost basis.
2. This stock selling binge will generate a tax revenue windfall for the Feds in Q4
3. For details, see Post-election: Government revenues will soar in Q4 … guaranteed.

This entry was posted on November 15, 2012 at 6:55 am and is filed under Taxes. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.