Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: rkral who wrote (61014)	8/11/2002 12:33:47 AM
From: ehasfjord	Read Replies (1) \| Respond to of 77400

Hi Rkral, You wrote... >Here you are close to a valid "double taxation" point .. >but you failed to make it. If you invest in mutual funds >shortly before a distribution, part of the distribution is >truly just a return of your investment .. yet you owe >taxes, according to Uncle Sam. That's crappy, I agree. Response: Most "normal" people gat into a "fund" for the long term. Therefore, they get hit, and hit BIG when the fund is losing money, yet the folks still pay capital gains. This is utter BS, and underlies the reasons that prople get out of managed funds. >But knowledge allows one to mitigate this effect .. by >investing shortly after distributions .. or, if you are >thinking about investing just before a distribution, by >asking the fund what the distribution amount is likely to >be and acting accordingly .. or investing in mutual funds >in a tax-deferred account. Response: most people don't do this. They expect the "fund to do well" over the long term. Please re-read response # 1. >Even though the funds value may go down it doesn't make a >difference if the fund sold "stuff" that had gone up in >value. Therein lies the double taxation. >Well, if you buy both CSCO and JPM .. CSCO goes up .. JPM >goes down .. you sell CSCO. You pay taxes on your CSCO >profit even though JPM went down. Same difference. You >don't get to recognize the loss until either the mutual >fund or the stock is sold at a loss. Response: Totally wrong! If you are in a "fund" and it sells CSCO at a profit, and the "fund" still has JPM at a loss, and the fund goes down, you still pay taxes on the CSCO sell, and take a bite on the JPM. The fund has lost VALUE, you still own JPM, and you are getting hit on the taxes on the CSCO sell. >On a more serious note, your "double taxation" claim seems >to depend upon a down market .. my "single taxation" claim >on an up market. Admittedly, I didn't consider the down >market in my previous post. I suggest we dispense with the >up-market case before proceeding to the down-market case. >What point(s) in my up-market argument didn't you agree >with? Response: None. However, please remember that a BUNCH of folks have lost money in their long term investments, yet have had to pay taxes, even though the fund has lost money, and this is utter BS. BTW, I believe that the market has not yet reached the final down. The pundits state wishy washy "things" - the market must go through capitulation, ie, the "folks" out there, must GET OUT OF THEIR FUNDS, "It is a stock pickers market" - well DUH!, when has it ever been so. Another BTW, If your fund(s) state the stock picker thing, or "it's been a difficult time", drop them right now! Take Care! (it's a stock pickers market 8-)"