| | | Re: re GST-B
When considering these sort of swaps, gains or losses aren't relevant beyond taxes. Taxes affect the amount available for reinvestment after sale and could be positive or negative depending on gain or loss. Once reinvestable cash is estimated, that number then becomes an input into the equations and it's then a matter of just doing the numbers.
Beyond tax considerations on gains or losses, present value of the security is relevant, not past value, same as current yield is relevant, not yield at cost. When doing this in an IRA, gains or losses don't affect calculations as there are no taxes.
In the bad/good ol' days when we had losses on all pfds, i wanted to swap one of my son's pfds to buy O-E at a better yield and price. He objected saying that would cause him a loss and he wanted to try to make his money back. I told him all money is green, and it didn't matter whether he recovered a loss in the other issue or recorded a gain in the new one, the math was the same. He understood this once i laid the numbers out for him. It's just a matter of knowing how to gather the numbers................................................................Xot |
|
