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Chuck Jaffe: Make These Mutual-Fund Tax Moves Now To Avoid An April Surprise
This is a column not about moves to make, but simply bookkeeping (if you're going to sell shares, which shares of a particular holding to sell for tax purposes).
A move that seems to be rarely discussed (and isn't in this one of Jaffe's columns) is using market swoons as an opportunity to reposition taxable accounts. This is the time when your capital gains will be at their lowest, so it's less painful to switch horses in midstream If you're riding a former thoroughbred that's now ready for the glue factory, this can be a good time to place your money on that promising yearling.
And thus exhausts my woefully sparse knowledge of horses.
Recharacterization are another tax move investors might consider this time of year.
From Ed Slott's website:
"The deadline to complete the recharacterization is October 15 of the year after the year of the conversion. If you miss this date, you cannot get an extension of time from IRS unless the fault is not yours."
Comments
Much of what Jaffe's written is simplistic. People here know I'm a fan of Kaye Thomas, at Fairmark.com. You'll find a much better description of how some of this works here:
http://fairmark.com/investment-taxation/capital-gain/stocks-and-other-securities/how-to-identify-shares/
A move that seems to be rarely discussed (and isn't in this one of Jaffe's columns) is using market swoons as an opportunity to reposition taxable accounts. This is the time when your capital gains will be at their lowest, so it's less painful to switch horses in midstream
And thus exhausts my woefully sparse knowledge of horses.
From Ed Slott's website:
"The deadline to complete the recharacterization is October 15 of the year after the year of the conversion. If you miss this date, you cannot get an extension of time from IRS unless the fault is not yours."
10 Things You Must Know About a Recharacterization:
https://irahelp.com/slottreport/10-things-you-must-know-about-recharacterization
The Recharacterization: A Valuable Tool in Your IRA Kit
https://irahelp.com/slottreport/recharacterization-valuable-tool-your-ira-kit