tbul@trsvax.UUCP (09/13/84)
Source: Money magazine, Aug 84, pg 59.
Stocks bought after June 22, 1984 must be held only 6 months to qualify
for long term capital-gains tax rate. Long term gains are taxed at 40% of
your federal bracket.
Thought you'd like to know.
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allegra!convex!ctvax!trsvax!tbul Fort Worth, Texastbul@trsvax.UUCP (09/14/84)
By the way, the bill was supposed to have been signed into law in mid-July but may not have been. Does anyone know if it has been signed into law? tbul
newton2@ucbtopaz.CC.Berkeley.ARPA (09/18/84)
Yup, it's de Law. Six mos. holding period to qualify for treatment as long-term capital gain. But watch out the Alternative Minimum Tax doesn't sneak up on your carefully crafted shelter and huff and puff and blow it out of the mixed metaphorical water...
newton2@ucbtopaz.UUCP (09/19/84)
I believe the situation with respect to property acquired before June 22, l984 is as you fear: the holding period is one year. The new 6-month holding period applies only to property acquired after that date (if indeed 22 June is the effective date- I don't remember). Tax writers take this approach frequently, often making the effective date retroactive to the date an action was agreed on in committee rather than when the law was actually passed or signed. This is to prevent an avalanche of hasty deals to take advantage of previously more generous rules. A recent example was the extention of the real estate depreciation schedule to 18 years from 15-- it applies to deals entered into somewhat earlier than the actual passage of the new law.
tbul@trsvax.UUCP (09/19/84)
< Upgrade your VAX to a TRS-80 > Unless I am mistaken, those stocks purchased before June 22, 1984 will have to be held for 1 year to qualify for long-term status. Those purchased on or after June 22 will qualify for long-term status after 6 months. Say you bought the stock on June 21, 1984. Instead of waiting for the full year for long term status, why not sell it, wait a month (to prevent 'wash sale' status) and buy it again? In this way you can cut your year wait for long-term status by a few months. Of course, if the stock rises when you don't own it, you lose... Example: case 1 Buy stock on June 21, 1984 long term status on June 22, 1985 case 2 Buy stock on June 21, 1984 sell stock on Oct 1, 1984 buy same stock on Nov 2, 1984 - wait one month to prevent wash sale long term status on Apr 3, 1985 - saves nearly 3 months Of course, in two months or so, this method will be worthless... case 3 Buy stock on June 21, 1984 sell stock on Dec 1, 1984 buy same stock on Jan 2, 1985 - wait to prevent wash sale long term status on June 3, 1985 - saves a few days only Thomas Bulkowski allegra!convex!ctvax!trsvax!tbul Fort Worth, Texas
halle1@houxz.UUCP (J.HALLE) (09/21/84)
Regarding waiting to prevent a wash sale: This wait is unnecessary if you sell for a gain. Only if you sell at a loss is it considered a wash. So if the stock goes up, sell it and buy it back the next day. (Wait the day to prevent FIFO/LIFO type problems.) N.B. This advice assumes that this practice is not specifically forbidden by the act shortening the holding time. Considering commissions, this sell-buy transaction is not worth the trouble unless you own a very large amount and intend to sell it quickly; i.e. if you are a speculator and not an investor.