Income Taxes and Record Keeping ( tax ) Message Board

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Strategies & Market Trends : Income Taxes and Record Keeping ( tax )

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To: k.ramesh who wrote (1675)	12/30/1998 4:00:00 PM
From: Bill Shepherd	Read Replies (3) of 5810

RE: Your 'cousin stock' idea is a good one, however isn't there anything against that, being so obvious a way to take losses? Just because everyone is doing that doesn't mean it is strictly above board. Ramesh, I think the IRS code says something like "substantially equivalent" security, or something like that. Their intent, IMO, is to preclude selling a stock and buying a warrant, or an option, or something that is essentially equivalent. At any rate, I don't know whether any tax rulings exist on these "cousin" stock trades, but I think it would be pretty hard for the IRS to make a case. Can you imagine the IRS trying to prove that Microsoft is equivalent to Oracle? He he he! Or FedEx is equivalent to UPS ? Too squishy, IMO. I think one would be on pretty safe ground here. However, I think you would be inviting trouble if you tried to tell that IRS that Vanguard's SP500 fund is different from Fidelity's SP500 fund, eh?? Regards...Bill S

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