Mephistopheles
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Posts posted by Mephistopheles
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I don't see Buffett selling Apple, but then again he's done some dumb things in the past couple years, mainly selling WFC and COST. The WFC sell at over a decade low was just ridiculous. Normally I don't bet against Buffett but I bought up a whole bunch of Wells right when he was selling.
As far as table pounding buys, who knows, maybe Charlie will convince him to invest in China? ATT might be a table pounding buy...
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But Mel Watt's term ended, and Trump appointed Calabria who proceeded to do nothing. Mnuchin also did nothing. So it's a little rich for him to be writing a letter on how decisive he would have been. Well, he had the opportunity to place in somebody he wanted, and that person did nothing! Why did it take this long to write the letter after the SCOTUS ruling? Is it because the shares are so illiquid and it takes that long to accumulate a big position? lol, joking; not joking
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Thanks for all the replies. So what I'm understanding is that if distribution > accounting profit, then that distribution is tax free. Will try to screen for more of these stocks and post them here if I find them.
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@Gregmal what is the best way you recommend hedging? Buy the VIX? Buy S&P puts? I'm thinking instead of selling and going to cash (and paying taxes), it's better to buy puts and then write off the losses. I have never hedged, let alone shorted or bought puts ever so I am a newbie with this stuff.
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6 minutes ago, Gregmal said:
No opinion or anything to add on the above other than that its a great little gimmick, but congrats on the place!
Thank you! Will have to have you over for a beer
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Let's say I want to generate income in my portfolio without paying dividend or income tax. How would one go about finding or browsing through companies that pay out "return of capital" dividends for which your cost basis goes down but you owe no tax on the income? I own some APTS and CLPR, also WMB which all are such.
I was initially under the impression that this is only a feature of MLPs but I guess not. Would love to hear your thoughts on the subject.
Context: I just signed a lease to move to NYC next week, so taxes have now become my immediate concern
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It says you lose 3 months of interest if cashed before 5 years. I guess if you want cash equivalent locked up then it's fine. But even when pulling for par after 1 year, you will only get 9 months of interest.
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47 minutes ago, KJP said:
In this context, "related party" is a statutorily defined term that ordinarily would not include a sibling:
"The second change would be an inclusion of a related party test when determining whether the taxpayer has acquired substantially identical specified asset. For this purpose, a related party includes the taxpayer’s spouse, dependents, controlled entities and estates and trusts, retirement and savings plans (individual retirement plan, Archer MSA, or health savings plan), Section 529 and Coverdell savings accounts, and other annuity and deferred compensation plans. The related party rule would be a substantial change and could create many traps for the unwary. The expansive listing of related parties would require taxpayers to carefully examine transactions before claiming tax losses on investment assets. It’s often the case that investments of these various related parties are managed by different firms that may not have any transparency into the other holdings, let alone able to coordinate the timing of acquisitions or dispositions. This could create significant headaches for taxpayers."
What is expanded in this new definition of related parties? I think the difference is including "dependents". Spouse, retirement plans, estates and trusts I believe always counted towards wash sales.
Including dependents is just stupid.
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4 minutes ago, bizaro86 said:
Are electricity and phone service already included in NYC rent? Those are almost always tenant paid here.
Nope. So that quote from the article doesn't make any sense.
11 minutes ago, rkbabang said:Why no A/C? Also a butler.
And why not free rent? It's about time that landlords start not charging for rent.
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29 minutes ago, ERICOPOLY said:
We have our own perceptions. I saw someone making a snide remark about "at least understand the meaning of the word" while in the same breath saying "if you're going to make it personal", and then twice ending the conversation by restating his point (having the last word) and then asking everyone if the conversation can be wrapped up. And the second iteration of this was prefaced with a statement that looked like "I've tried to explain it to you guys... here is one final time I'll repeat myself and if you don't get it you don't get it... " It was condescending was my viewpoint on that.
+1
If someone says the rules only apply to "acquisitions" not "sales" and then you point out where it says "sales" and then they revert back to it not applying to "sales of calls", the argument moves in circles. It's like that whack a mole game.
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48 minutes ago, Spekulatius said:
I don't understand the animosity towards @lnofeisone . This may or may not work. It was meant as loophole and that's possibly what it is, so why the hostility. No one is forced to use this trick.
Has anyone run a Turbotax test? That's the ultimate tax authority for me
since I am just a peon and do my taxes in TT. If TT says yes, I would be good to go.
No animosity from me. It was a back and forth on the claims presented.
Edit: And I love avoiding taxes as much as everyone else here. So I'd love to be wrong on the argument. But I simply find the argument flawed, as do Eric and others.
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And that sale is referenced in Publication 550, from which I'll post again:
You cannot deduct losses from ***sales or trades of stock or securities*** in a wash sale unless the loss was incurred in the ordinary course of your business as a dealer in stock or securities. A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you
1. Buy substantially identical stock or securities,
2. Acquire substantially identical stock or securities in a fully taxable trade,
3. Acquire a contract or option to buy substantially identical stock or securities, or
4. Acquire substantially identical stock for your individual retirement arrangement (IRA) or Roth IRA.
25 minutes ago, lnofeisone said:I'm not trolling nor am I saying that options are not securities. What I am pointing you to is the fact that everything in what you posted says "acquire" and the 4th step of what I posted is a sale.
For something to be a wash sale, there has to be a sale, you get that right?
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Can't figure out if you are trolling or not, or if you think that options are not considered securities.
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7 minutes ago, lnofeisone said:
Again, what you are highlighting applies to step 1 not 4.
1) Sell your stock at a loss (say you lost $10/share) <--applies here
2) Buy a call option - you can buy a deep in the money call (say, $15). You have now triggered a washsale. Meaning you can't take a loss on your stock but your cost basis for the call has gone up to $25/share.
3) Buy your stock back
4) Sell the call at a loss <-- doesn't apply here
Sure it does. The wording says "sales of stock or securities"
The call in step 4 would be considered a "security"
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4 minutes ago, lnofeisone said:
Can you please point me to where the statute addresses a sale of call/stock being part of a wash sale?
Well the name "sale" is in the term "wash sale" so that should be a good hint.
But since you asked-
From Publication 550:
You cannot deduct losses from sales or trades of stock or securities in a wash sale unless the loss was incurred in the ordinary course of your business as a dealer in stock or securities. A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you
1. Buy substantially identical stock or securities,
2. Acquire substantially identical stock or securities in a fully taxable trade,
3. Acquire a contract or option to buy substantially identical stock or securities, or
4. Acquire substantially identical stock for your individual retirement arrangement (IRA) or Roth IRA.
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16 hours ago, lnofeisone said:
You have a mismatch. You have more shares and securities bought than sold. How do you reconcile this?
https://www.irs.gov/pub/irs-pdf/p550.pdf
More or less stock bought than sold. If the number of shares of substantially identical stock or securities you buy within 30 days before or after the sale is either more or less than the number of shares you sold, you must determine the particular shares to which the wash sale rules apply. You do this by matching the shares bought with an equal number of the shares sold. Match the shares bought in the same order that you bought them, beginning with the first shares bought. The shares or securities so matched are subject to the wash sale rules.
You reconcile it by pairing the amount sold with the amount bought and ignoring the rest.
So if you sold 100 shares at a loss and then buy 150 shares, 100 shares from the latter transaction gets paired with the 100 you sold at a loss.
16 hours ago, lnofeisone said:Also, the statute says absolutely nothing about a sale of a call being a wash sale. This is what this whole thing is predicated on.
But it does. It clearly says options and stock is substantially similar. So, for this purpose it doesn't matter whether you are generating the loss from the sale of a call position or sale of stock. You also know that the 30 days is forward and backward looking.
And it's not a covered call. It's a sell to close transaction by your own words. You're closing off a long call position. So I'm not sure what the confusion is?
16 hours ago, lnofeisone said:Now going back to the original example I gave:
0) You are holding your stock
1) Sell your stock at a loss (say you lost $10/share)
2) Buy a call option - you can buy a deep in the money call (say, $15). You have now triggered a washsale. Meaning you can't take a loss on your stock but your cost basis for the call has gone up to $25/share.
3) Buy your stock back -> these shares are brand new shares and are not touched by the wash sale.
4) Sell the call at a loss -> selling of this call is not a wash sale transaction. What are you buying/replacing? That's just closing out of a transaction that was impacted by a wash sale.
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9 minutes ago, lnofeisone said:
No. You need the calls to capture the loss and tied up your first lot to the calls. The question will be related to the calls (substantially identical security) and not the second lot. The fool.com article doesn't conflict with this.
The loss on the calls will be a wash sale since you would have bought the new shares within a 30 day period. The loss from the old shares get tied to the basis on the call. Then you buy the new shares and sell the call, and the loss on the call (including from the old shares) gets tied to the new shares. The 30 days is forward and backward looking.
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On 10/10/2021 at 6:49 AM, lnofeisone said:
The strategy pupil is describing is called doubling down. There is another strategy (this isn't a recommendation, please verify with your CPA and do your homework
)
1) Sell your stock at a loss (say you lost $10/share)
2) Buy a call option - you can buy a deep in the money call (say, $15). You have now triggered a washsale. Meaning you can't take a loss on your stock but your cost basis for the call has gone up to $25/share.
3) Buy your stock back
4) Sell the call at a loss
This is a way to keep your shares and keeping your loss. The biggest disadvantage of this strategy is matching your tax rate (i.e., it's not idea if you held a stock for more than a year).
In this situation, you're taking a loss on the call while still having the stock, and if it's all within 30 days then it would still be a wash sale, no?
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@ERICOPOLYclutch move. I also happened to buy BABA options yesterday $300 strike Jan 2023
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BTI @ 8.5% yield. Easy when borrowing at 1-2% from IBKR
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1 hour ago, Frankie1 said:
if you are using Chrome and are plagued with the font darkness not only on this site but everywhere else that you may visit; then I recommend an extension called "make chrome text black". It does cost $20 a year but what a difference it makes when browsing sites without eye strain...
This is nice but I was referring to having the background black and the font white. The bright screen from the white background is what causes the eye strain. Sites such as WSJ, Twitter, IBKR have that option.
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Sanjeev, thanks for the updates. Appreciate your continued work with this site.
Would it be possible to have a "dark" mode for the board? So that it's easier on the eyes. I'm not a software person at all, so I don't know if this is complicated or not, but just wanted to make a suggestion for a small improvement that I'm sure many will love.
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I had a couple of pints of Guinness tonight. Cheers all!
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I have a family member, who was earning more in UE last year (when enhanced UE was $600) then he did at his regular job. So when the regular job asked him to come back, of course he said no. And his job was a manager of a fast food restaurant. Think about it, a manager, and yet he was still collecting more in UE than he did through salary.
So I am sure there are other people out there with the same economics with the $300 extra UE. Take that away and incentives will draw the people back to the jobs.
On top of that for those getting a free ride without having to pay rent, you take that away as well and it will for sure force all these people back into the labor market.
Buffett/Berkshire - general news
in Berkshire Hathaway
Posted
I like that nice Rockefeller reference