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Released December 11, 2001
Action required before
Dec. 24
to catch the year end deadline |
Due to broad price declines in many of the world’s stock markets, some of your investments may now be worth less than what you paid for them. Fortunately, there is an investment strategy that may provide a "silver lining" to your portfolio during brief periods of negative performance – Tax Loss Selling.
Using Tax Loss Selling, you can offset capital gains this year, reclaim taxes paid on past gains, or reduce taxes you could be paying on gains in the future. In other words, Tax Loss Selling can put more money in your pocket and keep more money in your pocket!
For more information on Tax Loss Selling, follow the links below:
The following is provided from a brochure produced by Franklin Templeton Investments, titled 'Strategies For
Real-life Investing: Tax Loss
Selling
Strategies
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Benefit from losses,
protect future gains':
Tax Loss Selling is a strategy that can provide you
with a “silver lining” during short-term bouts of
negative performance. By selling mutual fund units
for a lower price than you paid for them, you can
offset capital gains in the current year, reclaim taxes
paid on past gains, or reduce taxes you could be
paying on future gains.
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The solid line depicts the performance of the S&P 500 Index from January 1, 1998 to
September 30, 2001 (Source: HySales). The dashed line is for illustrative purposes only. |
WHAT ARE THE BENEFITS
OF TAX LOSS SELLING?
KEEP MONEY IN YOUR POCKET
Tax losses taken before December 31 can be used
against capital gains received in 2001. These losses
can also be carried forward to reduce the tax burden
of capital gains in the future.
PUT MONEY IN YOUR POCKET
By realizing a capital loss in 2001, you can recover
taxes paid on capital gains as far back as the 1998
tax year.
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They also have a Tax-Loss Selling Fact Sheet in Acrobat PDF format that can be downloaded using the above link. |
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