Had a quick question. Can someone point me to an article about then benefits to selling my worst stock for a loss for the tax benefit? I have been told by a fellow trader that I should but google seems to indicate that’s only for traders filing a schedule C for their trading. Hoping someone here could offer some guidance or advice.

Sue Weed: You can use up to $3000 of excess capital losses (greater than those offset by capital gains) against your regular income, thus reducing your taxable income basis. Since it takes 3 days for stock sales to complete I believe you are out of time for this year.https://www.irs.gov/taxtopics/tc409.html

Tax Topics – Topic 409 Capital Gains and Losses
irs.gov

Chris Smith: Well damn.

Chris Smith: Thanks for the link.

Sue Weed: Chris Smith you re welcome. I spent today fine tuning some positions to best utilize my gains and losses to the $3k limit, but even if I have loses in excess of the $3k they can carry over to the next fiscal year and be used then.

Chris Smith: Sue Weed thanks. Just finished my first year of trading and was trying to get all my ducks in a row. I would ask this question 2 hours too late.

Sue Weed: Chris Smith I sold the losers earlier in the year when the mkt was down (also used that time to roll some IRA money into a ROTH) so this month I was cherry picking gainers for balance.

Hank Hopkins: I have never understood the practice of annually balancing your portfolio, which I understand to be selling your winners and buying into your losers. I guess one hopes to capture profits and hopes current losers become next years winners. I hold high quality dividend stocks that go up and down, but always increase my cash flow and portfolio value in the long haul (5-10 years). I would rather buy more of my winners unless a stocks metrics substantially change. Could someone enlighten me on the other strategy?

Sue Weed: I also own a lot of high quality dividend stocks that I hold onto as they cycle, always reinvesting dividends. It is only a handful of stocks that I trade and will rebalance if necessary and they are usually non-dividend paying new technologies/biotec…See more

Douglass Arnold: If it’s a good stock keep it and keep reinvesting the dividend and adding to it It’s not a loss technically till you sell it

Chris Smith: It was a loss as of 10:00AM this morning. It was not a good stock. Not a dividend stock. Just a trade that bottomed so hard my stop loss didn’t trigger. So I moved it to my long column, where it got progressively worse.