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

To: ehasfjord who wrote (61015)	8/11/2002 5:34:38 PM
From: rkral	Read Replies (1) \| Respond to of 77400

OT...ehasford, re my CSCO & JPM example... 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. The CSCO and JPM example was my scenario to show that realizing gains (selling) and not realizing losses (not selling) ... has *the same loss in a personal stock portfolio as in a fund. You didn't provide a counter argument .. but moved my argument to the fund. How about trying that response again? A DOWN MARKET SCENARIO: And now to "run the numbers" for a mutual fund in a down market. As before, all numbers are per share unless explicitly stated otherwise. Re-investment of dividends and capital gains is assumed .. because it is most comparable to a stock purchase and sale. You buy a single fund share for $330. The fund distributes $25 which is re-invested in 0.1 share ($250 per share). You now own 1.1 shares with a cost basis of $355 .. paid taxes on $25 .. and have an unrealized loss of $80 ($355-1.1250). A 2nd distribution of $20 is re-invested in another 0.1 share ($200 per share). You now own 1.2 shares with a cost basis of $375 ($330+25+20) .. paid taxes on $45 .. and have an unrealized loss of $135 ($375-1.2200). The NAV declines to $175 .. you decide enough is enough .. you sell .. and now report a $200 loss ($375-175) to the IRS. The overall* net loss, and net tax loss reported to the IRS, is $155 ($200-25-20). If you buy stock for the same initial $330 and then sell that stock for the same final $175 .. the loss is $155 .. the same as for the fund scenario. So, I see no "double taxation" in the down-market scenario either. *Just where is the "double taxation" both you and mindmeld claim?* Ron P.S. You might try unchecking the "Use Fixed Font" box immediately beneath the reply text box.