Trading and the new tax bill

Here4money said:
Did they end up changing FIFO rules?
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Google is your friend.

https://www.nerdwallet.com/blog/investing/investors-need-know-tax-reform-plan/

No first-in-first-out rule on selling securities. The FIFO rule would have raised tax bills for investors because it would have tied your hands in determining which shares could be sold first. Rather than choosing to sell your recent purchase of, say, Apple stock, you’d be forced to sell the first shares you ever bought. In situations where those older shares had a much lower cost basis, you would’ve been on the hook for a bigger tax bill.

But this FIFO provision wasn’t included. You can still decide which shares you want to sell when.
 
truetype said:
Google is your friend.

https://www.nerdwallet.com/blog/investing/investors-need-know-tax-reform-plan/

No first-in-first-out rule on selling securities. The FIFO rule would have raised tax bills for investors because it would have tied your hands in determining which shares could be sold first. Rather than choosing to sell your recent purchase of, say, Apple stock, you’d be forced to sell the first shares you ever bought. In situations where those older shares had a much lower cost basis, you would’ve been on the hook for a bigger tax bill.

But this FIFO provision wasn’t included. You can still decide which shares you want to sell when.
More...

Thanks, didn't realize that was on the chopping block
 
truetype said:
Google is your friend.

https://www.nerdwallet.com/blog/investing/investors-need-know-tax-reform-plan/

No first-in-first-out rule on selling securities. The FIFO rule would have raised tax bills for investors because it would have tied your hands in determining which shares could be sold first. Rather than choosing to sell your recent purchase of, say, Apple stock, you’d be forced to sell the first shares you ever bought. In situations where those older shares had a much lower cost basis, you would’ve been on the hook for a bigger tax bill.

But this FIFO provision wasn’t included. You can still decide which shares you want to sell when.
More...

With the original FIFO rule, I honestly thought it would have made a strong case for year end sell off on the S&P. Just sell the long term buy and holds with low cost base and start over, than to be stuck with the new tax law for a long time not able to sell.

Don't know why they introduced it to begin with. I thought they were trying to engineer a late cycle plunge.

But then, they got rid of it. So now I can't see that sell off happening. Not for that reason anyway.
 
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For me, a business trader, Robert Green of GreenTraderTax is the authority. At this time it is unknown as to whether or not a business trader will benefit from the hooplaed pass-through tax cut. Greens most recent post has already been linked elsewhere, but here it is again... https://greentradertax.com/trader-tax-cuts-are-not-certain-yet/

One thing not discussed here as of yet, which affects non-business traders, is the complete elimination of miscellaneous itemized deductions. Home-gamer trader/investors now have no way (that I am aware of without assuming substantial IRS risk) to deduct expenses.

Happy Holidays to all!!
 
Here4money said:
Care to clarify? I'm not entirely sure what you mean?
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He means a lot of wealthy individuals who own stocks purchased near the lows and have a low cost base.

FIFO accounting hurts people with low cost base initial buys. Which means everyone who bought at the lows and held this entire time, would have been hit with the highest tax possible after FIFO kicks in. Which means there is a very good reason to decide whether you want to sell it off and hold only stuff you bought later. By doing so you get taxed with the old rule so you'd actually pay LESS tax overall. So it would have caused a sell off of sorts before the new year. Some people might want to hold on despite FIFO if they never plan to sell. But many will probably sell.

But they got rid of it so it's not a problem now.
 
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