L:
Wasupwitdat anyway.... why can't an institution sell in Nov and take a tax loss??? Is it just mutual funds or all institutions. I never understood that. Certainly individuals can sell in Nov and take a tax loss?? Why not other entities?
I just noodling here, but prior to the Tax Reform Act of 1986, you could adopt any fiscal year you wanted for a trust, which is what a mutual fund is. So the older bigger funds would have chosen September or October. But typically even then the easiest way to do it accounting wise was to close on the calendar quarter, so September was chosen a lot.
Now you must elect the year of the majority of your beneficiaries, which is the calendar year end; unless you get special permission or do some tricky stuff.
IN ANY EVENT, all report to the market on the Calendar quarter. That is when window dressing appears. That is when tax loss is incurred for the year. Now, you can't buy back DURING October, because of the 31 day rule. (Oh, you can, but you loose the tax loss, and some funds really don't care about their beneficiary's tax picture.) Now that's 31 days from the time the fund sold, so if they are really smart, and are going to do this, they sell early, so that they can buy back in the Middle of October, but they are not "really smart". So October sputters its way into November, every year. |
