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Portfolios 304: Strategies for Selling

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1.
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.
2.
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.
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 your basis composed of?
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Both of the above. Your basis is the combination of cash paid plus any dividends reinvested that have already been taxed.
5.
What is the purpose of tax-loss selling?
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To minimize the amount of tax that you pay on an investment that you have sold for a profit. Tax-loss selling is a tax-management strategy.