Tax Loss Sales: It's That Time of Year Again

in #money • 5 years ago (edited)

Hi Everyone 😺

While many of you have probably been thinking about all the Black Friday/Cyber Monday and Christmas shopping deals, @Crypticat has been focussing on Tax-Loss Sales. This time of year is a value investor's dream. You may find some stocks, cryptocurrencies, and other capital assets to be at an extra discount due to Tax-Loss Selling. Some of us are also expecting year-end bonuses to add to add to that shopping delight. Smart, wealthy people invest their extra money, while others spend their money or even max out their credit cards in the name of consumerism, this cat ain't no fool.

So What is Tax-Loss Selling?

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Tax-Loss selling is when you sell a capital asset at a loss to offset any similar gains, this can help lower your taxes payable. You can also carry forward a capital loss in some circumstances to offset future capital gains. There are various rules about this and your tax jurisdiction is probably different than mine, so you should consult your accountant. The most important rule involves a 30 day cooling period; you cannot buy the same stock within 30 days of selling it if you want your capital loss to qualify; it is this rule that helps lead to the sales this time of year.

Why Now?



Since it is the end of the year, it makes it very clean for your personal taxes to sell an asset now, in 2018 and wait your 30 days to buy it back in 2019. Generally speaking, assets which have trended down in 2018 will be victims of above average Tax-Loss selling this time of year. Humans are irrational creatures and sometimes don't want to end a year with a loser; they may also need extra money for Christmas shopping, entertaining, and winter tires; I have no clear idea why, but people tend to sell more securities at the end of the year. October and November have been terrible for the markets this year as well. So, compared to the past 12 months there are plenty of sales!

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For those of you who did exceptionally well, you have either received a large tax bill or are afraid of receiving one. Well don't fear, you may be able to offset some of your gains by realizing those losses. Don't think that those losers will ever gain their value again either, it is a fact, many cryptocurrencies and stocks will eventually be worth nothing. What goes down, may, in fact, stay down forever.

Forming an emotional bond with a particular security, stock or cryptocurrency is a great way to lose money and so is poor tax planning, so consult with your tax professional today!
STAY RATIONAL!

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This blog isn't intended to be financial advice and I am not an accountant so please don't attempt to make your own tax strategies without consulting a local tax professional. I am not suggesting you should invest in any particular security, cryptocurrency or that investing this time of year will result in above-average profits. You could lose all your money investing and as the past year has shown, many people have indeed lost most of their cryptocurrency investments. If anything I am suggesting that you ask your accountant about tax-loss opportunities to make the most of poor investment decisions.

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Who here thinks Steem is on sale and plans on buying some in the next couple of months? If you look into my wallet, you can see that I have been slowly accumulating more Steem. I may decide to buy some more soon as it is definitely cheaper than it was in March when I started this blog. What do you all think about buying Steem and powering up? Please let me know your comments below

Bye for Meow 😺

#cryptocurrency #life #investing #steem
5 years ago in #money by
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