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Clear filtersCost Basis Methods
When part of a position is sold, which shares were sold is a choice. The default is usually first-in first-out, and it is rarely a deliberate one.
Wash Sales
A loss is disallowed if a substantially identical security is bought within a window around the sale. The loss is not lost; it moves into the basis of the replacement.
Tax-Loss Harvesting
Realising a loss to offset a gain is a deferral rather than a saving, and the value of the deferral depends on the rate difference and on what is bought instead.
Required Minimum Distributions
Tax deferred is not tax forgiven. Traditional retirement accounts must begin distributing at a specified age, and the amount is set by a table rather than by choice.
K-1s and Partnership Structures
Some listed securities are partnerships rather than corporations. They report on a K-1 instead of a 1099, arrive late, and carry consequences that surprise holders.
Foreign Withholding on Dividends
A dividend from a foreign company is often taxed at source before it arrives. Whether any of it can be recovered depends on treaties and on the account it is held in.
State Considerations
Federal rules are only part of the picture. States tax investment income differently, and some securities are treated differently depending on where the holder lives.