Skip to main content

Details of Tax-Loss Swaps


As Director/Investments of The CR Wealth Management Group of Stifel, David Stone works closely with ultra-high net worth and high net worth clients. David and his colleagues collaborate with an experienced tax and estate attorney, as many of the group’s clients have complex tax needs.

To serve the needs of clients with complex tax situations, David draws on his knowledge of tax-loss swapping. This technique can serve as an option when rates have increased and caused the value of a bond to drop below its base cost. By selling the bond at a loss, the investor can fund the capital gains tax due upon the sale of an asset.

David understands the many intricacies involved in a tax-loss swap, including the wash sale rule, which forbids the recognition of a loss if the investor purchases a substantially identical product within a 30-day period prior to or after the sale.

He must also determine whether the relevant gains and losses will occur within or after 12 months. Gains or losses experienced on an asset held for 12 months or more are classified as long term, while all others fall under the category of short term. A short-term gain will offset a short-term loss and vice versa, and same category gains and losses must offset one another before the other category comes into play.

Stifel does not provide tax advice. You should consult with your tax advisor regarding your particular situation.


Stifel, Nicolaus & Company, Incorporated | Member SIPC & NYSE

1095 Avenue of the Americas
3rd and 4th Floor
New York, NY 10036

Comments

Popular posts from this blog

Reduce Taxes Through Tax-Loss Swapping

David Stone joined the CR Wealth Management Group of Stifel as Director/Investments in 2016. At Stifel, David Stone and his team serve the interests of their clients by utilizing strategies such as tax swappin g. A strategic form of tax planning, tax-loss swapping involves the sale of investments that have experienced losses. In their place, investors purchase stocks from firms in sectors with equivalent foundations. When completing these transactions, investors must keep the IRS’s wash-sale rule in mind. This rule prohibits an investor from recognizing a loss on the sale of a security if he or she purchases a “substantially identical” security within 30 days before or after the sale. Since the IRS’ definition of what constitutes a “substantially identical” security is somewhat vague, you should consult your tax advisor before making a purchase. When employed effectively, the tax-swap strategy may allow investors to bolster the diversity of their portfolio. Moreover, it serves as ...

Hedge Funds - Leveraged Investment Strategies

As Director/Investments with The CR Wealth Management Group, David Stone oversees a wide range of financial management activities, with an emphasis on providing clients a secure income in their retirement years. David Stone and the advisors at Stifel provide a full host of third-party independent money management strategies, including private equity, exchange-traded funds (ETFs), and hedge funds.  While hedge funds lack the liquidity of mutual funds, they offer Stifel clients a broader range of securities in which to invest. In addition to stocks, bonds, real estate, and other traditional investments, hedge funds enable the holding of futures, options, and other types of derivatives. Article provided by David Stone, Director/Investments with Stifel, Nicolaus & Company, Incorporated, member SIPC and New York Stock Exchange, who can be contacted in the New York, New York office at (212) 328-1000. Investors should be aware that hedge funds often engage in leverage, short-sellin...

How The CR Wealth Management Group Evaluates Client Situations

David Stone is Director/Investments of The CR Wealth Management Group of Stifel . As a member of the team within Stifel, David works with sophisticated clients to help them preserve capital and create stable wealth management plans. Service is a key aspect of the team’s offering, and it subscribes to the “Four Seasons” model, which was established by the luxury hotel chain to define how it provides its services to clients. Further, the team also works directly with clients to evaluate their current standings and provide timely updates that allow for the further development of strategies. Meetings are held with each client every financial quarter to provide updates on progress and examine new factors that could affect the tailored wealth management plans formulated for each client. Additionally, the team holds an investment meeting every year with each client to determine holistic strategies for the next fiscal year.