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Tax Loss Harvesting Question
11-11-2020, 08:09 PM
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#1
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Thinks s/he gets paid by the post
Join Date: Jun 2013
Posts: 1,030
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Tax Loss Harvesting Question
Since I’m 58 & have a ACA high deductible health care plan, I have to watch my income closely. The MAGI cliff for 2020 is $49,960.00
An estimate of the remaining dividends to be paid for 2020, shows I should be under the cliff, but only by approximately $1,500.00
*I've already contributed the max of $4,550.00 to my HSA*
To err on the side of caution, I may decide to realize some losses.
I have a substantial amount of those in Kinder Morgan Energy (KMI)
I'm guessing I first purchased shares around 2008.
On December 3rd 2014, the company reorganized. They changed from an MLP, to a C-corp. New shares were assigned to me, & any previous buys, dividend reinvestments, cost basis, etc were erased & my new purchase date was
12-03-14
I haven't had a lot of experience in tax loss harvesting, choosing FIFO, or specific shares to sell, etc, which leads me to my question.
The cost basis for the new shares assigned to me is $40.53
Let's assume I want to realize approximately $1,000.00 in losses & use the FIFO method. Shares closed at $13.03 today, $27.50 lower than 2014. If I understand it right, I could sell 35 of those shares & realize a loss of $962.50
Is this correct ?
Thanks in advance.
__________________
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11-11-2020, 10:19 PM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 28,226
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Yes, looks correct to me as long as you don't repurchase the same shares within the alloted time. Since the basis of all your shares is $40.53 a share, it doesn't much matter if you use FIFO or average cost or specific identification.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56...target 65/35/0 AA TBD
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11-12-2020, 01:09 PM
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#3
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Thinks s/he gets paid by the post
Join Date: Jun 2013
Posts: 1,030
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Quote:
Originally Posted by pb4uski
Yes, looks correct to me as long as you don't repurchase the same shares within the alloted time. Since the basis of all your shares is $40.53 a share, it doesn't much matter if you use FIFO or average cost or specific identification.
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The vast majority of the shares have a basis of $40.53, some are lower due to dividend reinvestment at later dates.
Thanks for the reply.
__________________
"No beast so fierce but knows some touch of pity, but I know none, therefore am no beast"
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11-12-2020, 01:52 PM
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#4
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Recycles dryer sheets
Join Date: Feb 2019
Location: Tampa Bay
Posts: 155
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Watch the dividend reinvestment, you will want to discontinue that until meeting the time requirement for wash sale.
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11-12-2020, 02:44 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Jun 2013
Posts: 1,030
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Quote:
Originally Posted by FLSUnFIRE
Watch the dividend reinvestment, you will want to discontinue that until meeting the time requirement for wash sale.
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My sincere thanks!
I never would've thought of that
__________________
"No beast so fierce but knows some touch of pity, but I know none, therefore am no beast"
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11-24-2020, 08:42 AM
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#6
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Recycles dryer sheets
Join Date: Nov 2019
Location: Jersey City
Posts: 239
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The most beneficial losses are short term so if you have something that lost money within the last 12 months, sell that first.
https://www.investopedia.com/article...es-and-tax.asp
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12-09-2020, 10:37 PM
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#7
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Thinks s/he gets paid by the post
Join Date: Jun 2013
Posts: 1,030
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Quote:
Originally Posted by tenant13
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Thanks for this.
__________________
"No beast so fierce but knows some touch of pity, but I know none, therefore am no beast"
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