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For some peculiar reason , perhaps a socialist envy psychology to punish “speculators” gains on stocks that are held for at least one year pay half the tax of traders who make short term profits. This is the reason that many traders hold their investments for at least a one year time period.
American s with a stock portfolio , who are presently in a loss situation , might well now consider purchasing enough additional stocks to match their original purchases and investments . Wait 31 days as per the tax laws “wash sale” provisions.
As an example say for example that an American owns one hundred shares of stock that bought at 10 dollars has dropped to a value of seven 7 dollars. This investor could purchase an additional 100 shares at the new seven dollar price , wait 31 days and then specify to the broker the sale of the original 100 shares . The net result is that the American investor now still has 100 shares, but could have a valuable tax loss of $ 300 that he could apply against profits elsewhere in the market.
This is both an acceptable accounting and legal maneuver to be discussed with the American investor’s accountant or other financial advisor.
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