Trade This Stock - The Mathematics of Should I Sell this Stock and Buy Another in a Taxable Account?

Business & Corporate, Estate Planning

By John W. Eilers, Esq.

Trading stocks for a profit is anything but an exact science. Mathematics, however, can be applied to help the investor/trader analyze the opportunity presented and the cost of the decision to sell one security and to buy another. That cost the sale of an appreciated investment is made up of four measurable factors: Capital Gains Taxes; State Capital Gains Taxes; Broker’s Commission; Trading spread (mark down). Taxes and commissions reduce the funds available for reinvestment and so the investor must do better with less money in the next investment. The goal here is to define how much less will be available for reinvestment, and how much better than the prior investment the new investment must increase in value for the investor contemplating the trade to break even. Click here for the complete article. Please contact Rayan Coutinho at rfcoutinho@woodlamping.com for complete details about the legal services offered by Wood & Lamping LLP.

admin @ January 18, 2008