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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Robert Rose who wrote (103144)	5/10/2000 12:51:00 AM
From: Gary Korn	Read Replies (1) \| Respond to of 164684

As there is no loss carryforward for individuals . . . Robert, There is indeed a loss carryforward for individuals. You can use/deduct up to $3,000 of losses (to the extent they exceed gains) in the current year, and can then carry forward the remaining losses into the following year, so as to use them to offset gains. Gary Korn

To: Robert Rose who wrote (103144)	5/10/2000 4:04:00 AM
From: Sam Citron	Read Replies (2) \| Respond to of 164684

Robert, Gary is correct. I am puzzled by your statement that there is no loss carryforward for individuals. However you are correct that under the scenario you outlined there would indeed be a $500K loss over that 2 year period. However, you would be able to carry forward (but not backward) the $1M loss suffered in 2000 into 2001 and beyond, assuming you couldn't use it in 2000. If this still leaves you distressed, the onus is upon you to design a tax code that is more favorable to capital investment and that is both equitable and efficient. BTW, I think that in setting prohibitively high rates for ST capital gains, the IRS damages liquidity. It pains me to draw the analogy of the stock market to a casino, but who wants to be stuck in a casino for an entire year? Markets are most efficient if investors can opportunistically move in and move out of investments with no artificial time constraints, but in response to pure market forces. If you tamper too much with this, the invisible hand of the market may become palsied.

To: Robert Rose who wrote (103144)	5/10/2000 9:16:00 AM
From: Glenn D. Rudolph	Read Replies (1) \| Respond to of 164684

The biggest problem is the structure of the tax code. Let's say one makes $1M in ST gains in 1999, and is taxed at 39.6% federal and 10% state (as I am here in CA), leaving 500k. Let's then say one suffers $1M in losses in Mar/Apr 2000. As there is no loss carryforward for individuals Rob, Your point here is excellent. Without getting into specific numbers, I can give a good example of this. I had a good year in the market in 1996. I had to pay ST a "large" capital gains tax in addition to any more taxes due from being self employed by April 15, 1997. I always pay sel emplyment tax on one of my store's income not the issue here. I can't recall without looking my performane in 1997 in the market but it was not exciting up or down. I lost my shirt as the saying goes shorting Amazon in 1998. Never mind the fact I paid many hundreds of thousands for gain in 1996. I could only deduct $3000.00 from my income in 1998. Same for 1999, etc. In addition I still had to pay self employment taxes on one of my stores since one is a proprietorship. Maybe I am a bit biased but I believe there is something wrong with this picture. Your approach makes perfect sense to me.

To: Robert Rose who wrote (103144)	5/10/2000 10:19:00 AM
From: Bob Kim	Read Replies (1) \| Respond to of 164684

Rob, Although there are specific deadlines, an individual can elect mark-to-market treatment on trading treated as a business activity (Sch C). Under this scenario there is no $3K annual limitation on losses and no FICA responsibility. However, you cannot use your profits to fund retirement accounts. You must also treat all your positions as closed out as of the end of the year for that year's taxes and effectively repurchased at the same price for the next tax year.