Loss making stock positions

Completely understand that the stock market is kicking us from all directions that sometimes it feels like calling it quits. But if you have loss making positions then you can sell those and buy it back after 30 days. This way you can atleast claim it as capital loss on income tax return and make uncle sam refund you the amount which is equal to (whatever your income tax bracket is)*loss.

Watchout for the Wash Sale Rule though.

Even more sophisticated way to do this to sell a covered call option. That way you can make the market pay for your promise to sell the stock at the price you chose.

This entry was posted on 21 Oct 2008 at 15:24 and is filed under Personal Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.