Today's Stock Market Swoon

Apsken at Apsken at
Fri Apr 14 19:30:42 PDT 2000

Max wrote,

> Not likely. Taxes on cap gains are not owed unless
> you cash in, so you needn't cash in to pay taxes on
> gains that are not yet taxable.
> I'm no tax-planning bandit -- that's a whole career
> in itself -- but far as I know the only relevant day
> for tax avoidance is Jan 1, since gains realized then
> are pushed into the next tax year.

The only things you can buy with paper profits are other companies (Time Warner, etc.). These folks wanted to spend their wealth-effect money on houses, cars, fast living, and did spend a lot of it, incurring actual capital gains. This week the tax bill arrived, so they had to cash in more shares, at the same time everybody else did.

Ken Lawrence

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