tax selling

Tax selling

Selling of securities to realize losses that will offset capital gains and reduce tax liability. See: Wash sale.

Tax Selling

1. The act or practice of selling stock or other securities at a loss in order to offset gains from other investment or income. In the United States, one is able to reduce one's taxable income by the amount one has lost in investing. Therefore, it is common to sell securities that have declined anyway at the end of the year and thereby reduce one's tax liability.

2. The act or practice of selling stock or other securities at a gain in order to reduce an expected higher tax liability. Tax selling at a gain is common in December when an investor expects his/her income to be higher the following year. Thus, one pays the higher income tax on the gains this year rather than pay the higher still gains next year.

tax selling

The sale of securities to establish gains or losses for income-tax purposes. Significant tax selling often occurs in December, especially following a bear market, as investors seek losses to offset previous gains or other income. An investor may engage in tax selling to establish gains when he or she expects to be paying a higher marginal tax rate the following year. Compare tax-loss selling.
References in periodicals archive ?
Also, ATI is a long-selling process and the opportunity for loss selling diminishes as the tax selling weeds out the initially underperforming stocks.
Tax selling, though not over yet, is creating buying opportunities.
To the extent that tax selling is documented in November, this paper presents evidence supporting an explanation of stock seasonalities based on selling pressure.
For many investors the date marks the opening of tax selling season.
Instead of tax selling Spear and his team are seeing unabashed window dressing in leaders such as Starbucks (NASDAQ:SBUX) and Autodesk (NASDAQ:ADSK).
Global Equity Trading Strategist Lazlo Birinyi's work on money flow activity suggests that the market is in a short-term decline caused by tax selling and margin selling and not a secular decline triggered by inflation fears.
Investment broker Walt Clark notes that the period after Thanksgiving is called tax selling season, because many investment clubs tend to sell stocks that are at a loss in order to off set some of the gains made through out the year and lessen their tax liability.
The 90-day period of time in which the Company's stock price could recover was coincident with year-end tax selling and therefore the probability of price recovery was unlikely.
More tax selling will come between now and the end of the year, but it won't be enough to be a drag on the market," McElroy said.
We believe that our holdings are not being fairly valued by the marketplace and that prevailing market conditions coupled with year-end tax selling has adversely impacted the market price of our common stock.