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Biotech / Medical : Ligand (LGND) Breakout! -- Ignore unavailable to you. Want to Upgrade?

To: JT who wrote (10638)	11/2/1997 12:58:00 AM
From: Andrew H	Respond to of 32384

>>Regarding the MF's selling in October: I assume they would sell their positions that are out of the money for capital losses?<< As I understand it, in order to calculate the capital gains (or losses, but we are talking gains this year) mutual funds must pay out to shareholders for the year, the funds must take BOTH all the profits and losses they intend to by the end of October. They must also sell if they want to offset losses for tax purposes. Many funds are most likely holding LGND at a profit, so some would be likely to sell simply to take some gains for the year or to offset some other losses, even if they thought LGND might do well over the next few months. As I understand this, it is mostly for tax purposes.

To: JT who wrote (10638)	11/2/1997 9:39:00 AM
From: lavalamp	Respond to of 32384

JT, the wash sale rules would prohibit a mutual fund from selling LGND (who has a loss?:>) from buying the stock for 30 days before or after the shares that were sold at a loss (if they were trying to recognize the capital loss ). the wash sale rules apply to all taxpayers other than stock or securities dealers (ie . market makers). So, you are very correct that if a mutual fund had a loss in LGND and sold it on Friday, they would have to wait 30 days to repurchase those shares (unless they had already purchased those replacement shares 30 days before) in order to use the loss to off set gains in the mutual fund. a good thread for tax questions started up recently on SI. Titled Income Taxes And Recording Keeping .