Tax Rascal

No Santa Claus Rally This Year

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Investors have long known that December and January are among the best months for stocks. Most investors know why, too: late in the year, it’s possible to sell losing stocks in order to shelter profits from the rest of the year. For example, if you’ve lost $1000 on GE, and made $1000 on IBM, you can sell both, take both losses—and pay not capital gains taxes on your profit.

Because of this, it makes sense to sell at the end of the year. (The IRS will let you buy the stocks back after 30 days and still give you the tax penalty.) And if people are selling stocks they still like, they’re going to buy them back later. All this … Read more...

“Tax Me If You Can!” Are Corporate Tax Shelters Really a Big Deal?

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A few years ago, PBS put together a special called “Tax Me if you Can“. And, regardless of how you feel about paying taxes, it’s clearly a big issue: they estimate that companies avoid up to $50 billion in taxes every year through tax shelters. The number may be high, but the idea is spot on: there is a lot of money sloshing into corporate treasuries that could be sloshing into the US treasury, instead.

But that’s a superficial way to look at it. There are some important questions that tax shelters bring up, and not all of them can be answered by soaking the rich:

  1. Should people be penalized for following the rules? The tax code is


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