Alot of that just changed for 2018 with the new tax law. Interesting point though.One of the most creative way for you to gift somebody something tax-free is to actually make that person sue you and then you lose on purpose. Any gift then that is awarded to your intended recipient through a court judgment is tax-free.That's the law. Any money won through court judgment is tax-free. That explains why everybody loves to sue so much in America.
I need to lose $5000. (long term capital gains) in order to make over $20,000. Obamacare...
- Thread starter Cabin111
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He mentioned he needs longterm capital losses not shortterm. One option is to lose approximately $8,500 in futures trading which makes (8,500 *60%= 5,100) loss in long-term and the rest of the loss from 8,500 (3,400) a shortterm loss. This is actually easy. Buy really far otm futures options on the day of expiration( doesnt have to be as long as the spread is wide to cause your losses with ease) and sell it back for close to zero. Comms and fees are part of the loss so also factor those in the calculation.
I guess this comes with extra 3,400 unnecessary losses. If you have longterm capital gains that needs to be realized this year, short-term losses can offset some, so you can adjust the needed losses on those futures accordingly. I believe you can use spx options instead of futures as well. spy etf and/or options are a little vague on the 1240 treatment.
Anotther thing you can do is sell 10 /es futures contracts and buy 2,000 spy etf simultaneously and put a oco stop buy order 17 points away from entry price with buy limit order 85 pts away on the es futures while spy etf sell limit order 1.7 pts with stop market order 8.5 dollars away (given that your broker provides 24 hour spy etf trading). This ratio will offset the shortterm losses from the futures through spy etf gains or if the market keeps trending the unintended way, it will give you a gain of 25k ish in total to make it worth it. This comes with market risks during times of uncertainty and gaps so I'm not really recommending but just being crative in response to the question. Just being theoretical.
Do not take it as a serious advice or any guarantees. Just having fun here.
In order to have longterm capital losses that don't already exist in the portfolio, I couldn't really think of anything other than the 60/40 rule to take advantage of for the given same year.
I guess this comes with extra 3,400 unnecessary losses. If you have longterm capital gains that needs to be realized this year, short-term losses can offset some, so you can adjust the needed losses on those futures accordingly. I believe you can use spx options instead of futures as well. spy etf and/or options are a little vague on the 1240 treatment.
Anotther thing you can do is sell 10 /es futures contracts and buy 2,000 spy etf simultaneously and put a oco stop buy order 17 points away from entry price with buy limit order 85 pts away on the es futures while spy etf sell limit order 1.7 pts with stop market order 8.5 dollars away (given that your broker provides 24 hour spy etf trading). This ratio will offset the shortterm losses from the futures through spy etf gains or if the market keeps trending the unintended way, it will give you a gain of 25k ish in total to make it worth it. This comes with market risks during times of uncertainty and gaps so I'm not really recommending but just being crative in response to the question. Just being theoretical.
Do not take it as a serious advice or any guarantees. Just having fun here.
In order to have longterm capital losses that don't already exist in the portfolio, I couldn't really think of anything other than the 60/40 rule to take advantage of for the given same year.
I am not a pious person. But what comes to mind are the slaves in Egypt. Pharaoh made the slaves gather their own straw for making bricks, and maintained the same quotas as when straw was being provided for them. The slaves prayed for the strength to live day-to-day. The slaves fucked up... they should have prayed to no longer be slaves!!
Manufacturing a loss of $5K ONCE, may be prudent due to a time constraint. But if you are not tracking changes in tax law, AND looking for ways to NOT BE part of (adversely affected by) the behavior modification US tax system, then you too, are fucking up, no different than the slaves in Egypt.
JMHO. Carry on.
Manufacturing a loss of $5K ONCE, may be prudent due to a time constraint. But if you are not tracking changes in tax law, AND looking for ways to NOT BE part of (adversely affected by) the behavior modification US tax system, then you too, are fucking up, no different than the slaves in Egypt.
JMHO. Carry on.
Nice thought experiment. Unfortunately for all your good work the OP and/or their accountant are mistaken in a couple of ways. First, you don't need long-term losses to offset long-term gains. Gains of the same type are netted against each other first, then you use whatever losses you have left against whatever gains you have left. Second, I'm not sure the OP understands the way the health care subsidies work. My understanding is that it's not an all or nothing impact like he things, although I may be mistaken if there is something specific to their state.
You are right on long term vs short term. I was going to call my CPA (after a few days vacation that he probably took), and line up long term vs short term. The subsidy for my wife's and my policy is $1,952. per month!! The subsidy becomes less and less as you get toward the cut off amount for us ($67,000. something...Closer to 68K).
Also that is for 2018. Policies in my age group are rising about 20% per year. I tried Googling, but couldn't pull up how fast older people's policies are rising...But it's big time. SOOO, the subsidy will be even greater in 2019...But again, they look at 2018 income as a guide for the subsidy. Congress and the president are not getting rid of Obamacare. They will allow the states to cut some of the benefits to try and keep the costs from rising (2019 and beyond). So we have to plan accordingly...
I was just talking in perspective as capital losses to offset his income rather than offset long-term gains although I understand you can only offset 3,000 of the income as a deduction. Regardless, I don't understand what exactly his situation is nor am I an accountant, so my thought experiment was just for fun as I have said.
Probably should have responded to the OP instead, I liked your little thought experiment!I was just talking in perspective as capital losses to offset his income rather than offset long-term gains althoughI understand you can only offset 3,000 of the income. Regardless, I don't understand what exactly his situation is nor am I an accountant, so my thought experiment was just for fun as I have said.
If you could save (make) maybe $25,000. in 2019 by not working hard would you do it?? Give me an incentive and I'll take it...I'll run with it. It reminds me of Sweden or the old USSR. I don't make the laws...Just try and find my best angle out there. People hide their assets all the time. Assets grow...Income remains low. It almost reminds me of trick plays in sports...
This book was on the New York Times best seller list for over 3 years!! It is worth a read...The Millionaire Next Door
https://www.google.com/aclk?sa=l&ai...hUKEwimwoT1us_aAhUJgK0KHZakB48Q9aACCDM&adurl=
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The problem is, that you don't have an insurance against your stock position rallying in the last few days/hours of the year. So just to be sure, you have to run your tax software in the last days of the year and adjust.
The 5K loss or 23K gain is a perfect earnings situation. The earlier mentioned AMD has earnings on the 25th of April, so get in position....