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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era

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To: porcupine --''''> who wrote (1089)1/1/1999 10:59:00 PM
From: Sr K  Read Replies (1) of 1722
 
<< if your capital gains tax would be 28% on the sale of a stock, your next purchase would have to gain 28% just to break even>>

Two errors! The gain would have to be 100/72 = 38.89% ... but only if your basis were zero!

OTOH if you are up 100% the tax would be 28% (or 20%) on the gain from the sale of a stock, your next purchase would have to gain 100/86 = 16.3% (or 100/90 = 11.1%).
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