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To: Chuck Williams who wrote (69580)	2/19/2001 4:41:42 PM
From: Dennis O'Bell	Respond to of 99985

If you have cap gains from early spring, losses from late fall can be written against them (provided one has avoided wash sale rules.) That's what he was talking about, and a lot of people are in that situation.

To: Chuck Williams who wrote (69580)	2/19/2001 4:41:51 PM
From: Zeev Hed	Read Replies (4) \| Respond to of 99985

Chuck, I believe David was referring to refunds due to the fact that many people saw their tax liabilities being quite high early in 2000 and paid large quarterly payments. As far as I know, as long as you paid at least your 1999 tax liability in those quarterly payments (I think it is even just 90%), there is no reason to increase your quarterly payments even if you can estimate that you may be owing more than paid. Why let the government use your money "before its time"? Money, like a good wine, should be allowed to age as long as possible in your own caskets (g). Zeev

To: Chuck Williams who wrote (69580)	2/19/2001 4:46:28 PM
From: David E. Taylor	Respond to of 99985

Chuck: Your point is valid if there are only large capital losses to take into account, when the $3000 limit applies. But you can deduct losses up to the amount of any gains, plus the $3000. Berney's point, with which I agree 100%, is that the quarterly tax deposits for 2000 (the last of which was due 1/15/01) are generally calculated (by accountants) based on 1999's tax liability to avoid tax penalties for underpayment come 4/15/01. So before the post labor day decline, most people would have deposited 75% of their estimated liability for the year 2000 based on their 1999 tax liability, with only the 1/15/01 payment left to go. Now comes the year end crash, and those who stayed invested and didn't bail out are looking at a substantial decrease in the value of their portfolios, and with hefty estimated tax payments already deposited. Hence the heavy year end tax loss selling to wipe out as much of the year 2000 realized cap gains as possible, thereby reducing (or even eliminating) the total tax liability for the year. Do you make the 1/15/01 payment on schedule? Probably, unless you have the time to run the tax return calculation and figure out if its needed or not to meet any remaining net liability for the year. If you sold enough before year end to totally offset your earlier gains, then those three (or four) estimated tax payments you made will become a refund in April. Last April, the Treasury got a huge inflow with tax returns, which I believe was due largely to the cap gains taxes coughed up. This year, I believe the Treasury will face a large outflow of refunds for the above reason. I'm one of those doing exactly what Berney talked about. I got my payment schedule for 2000 from my accountant last April (based on my 1999 liability, which was quite large), and made three quarterly payments by 9/15 on that schedule, because through 9/01/00, I had rather large gains on which I would have owed an additional substantial lump sum to the IRS on 4/15/01. Feeling pretty smart from all the good moves I'd made over the last 2 years, I held on to a good chunk of my long term holdings through year end, not believing that the uncertainty caused by the election dead lock would keep buyers out, not appreciating the domino effect of Kumar's prescient call on INTC and the box makers, the abrupt decline in capital expenditures by the telecoms, etc. etc. I did do a few "smart" things, but they were overwhelmed by the dumb things I did do and smart things I didn't do. So I exited every losing position in my taxable accounts by year end, and have thereby reduced my tax liability from a significant amount to virtually zero. So at least from a personal point of view, the Treasury will get little, if anything from me in April, when they would have received a significant contribution to the surplus had events not transpired the way they did. Multiply me by several millions, and you see the problem. It will all come out in April, and it's going to be real interesting how big an effect on Treasury receipts this all has. David T.