Jazz102, I'm still missing something. How would this be financially prudent? How would TEO benefit? First, what you are saying is that assume TEO has made a HUGH gain somewhere and he must now find a stock that will go down in value, buy it while it is high, then sell it when it is low so he will have a loss to offset his gain from the first stock. Do this all so he won't have to pay any taxes on this gains. To make it more clear. Assume one has a $10,000,000 gain from selling XYZ Co. Now in order not to pay capital gains taxes let's find a company that one can invest in where he will have a loss of $10,000,000. That's just great. +$10,000,000 -$10,000,000 = $0. Hot dog $0! No gain, no taxes. Give me a break!
Some points to consider:
(1) All of TEO's purchase are in pension plans. Any sales within a pension plan are non-taxable events.
(2) Finding a stock that you are sure will go down in value is just as difficult as finding one that you are sure will go up in value.
(3) If you can find a stock that you are sure will go down in value, then short it while it is high (say $20 per share), then replace it when it is low (say $10 per share). You have just made $10 per share. See how easy that was. |
