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Portfolios 304: Strategies for Selling

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1.
In which situation might you consider waiting to sell an investment?
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A big capital gains tax would hit you hard right now. Consider waiting until you can make up that hit with other tax savings.
2.
When might you consider waiting to sell an investment?
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If you've held the security for less than one year. You must pay ordinary-income taxes--which range from 10% to 35%--on investments you've held for less than a year.
3.
Your basis in an investment is how much you paid for it.
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False. You may need to include reinvested dividends that have already been taxed.
4.
What is tax-loss selling?
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Selling investments that you've lost money in to offset the gains you're taking on winning investments. Tax-loss selling is a way for investors to manage the amount of taxes that they pay on their investments today.
5.
Your basis in an investment is a combination of cash paid plus any dividends reinvested that have already been taxed.
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True. In a nutshell, basis is all the money you've put into an investment. When you sell the investment, you subtract this basis from the proceeds to arrive at your capital gain.