tax swap

Tax swap

Swapping two similar bonds to receive a tax benefit.

Tax Swap

A situation in which an investor sells a long position to claim a capital loss for tax purposes and immediately buys an equivalent position in a similar (but not the same) company or industry. A tax swap allows the investor to reduce his/her tax liability while not running afoul of the wash sale rule, which states that one cannot claim a capital loss for tax purposes if one repurchases the same position within 30 days. See also: Wash sale.

tax swap

The sale of a security that has declined in price since the purchase date and the simultaneous purchase of a similar, but not substantially identical, security. The purpose of the swap is to achieve a loss for tax purposes while continuing to maintain market position. See also wash sale.
References in periodicals archive ?
City, Austin school board look to save millions with tax swap plan, Austin American-Statesman
This isn't about cutting taxes per se; rather, this is the tax swap to end all tax swaps.
We'll focus on the tax swap and explain how it reduces an investor's federal income tax liability.
This is why such prominent conservative economists as Kevin Hassett, Glenn Hubbard, Greg Mankiw, and Art Laffer have expressed support for a carbon tax swap.
Nearly two thirds, 63 percent, opposed the governor's tax swap proposal, which eliminates state income taxes but increases sales taxes, while only 27 percent supported the plan.
Such a tax swap would be a bad deal for businesses, families, and public education.
The concerns includes, among others, the definition of tax swap sales whereby an investor buying shares in the same sector within 1 month of sale will come under the definition and losses booked under such transaction will not be admissible for capital gains tax purposes.
energy tax policy would include an end to energy supply subsidies, a green tax swap, an end to the gas guzzler tax loophole, the possible use of "feebates," and conservation incentive programs.
It is actually called the Food Tax-Adult Materials Tax Swap Act of 2007, and is sponsored by Representative Stacey Campfield and Senator DeWayne Bunch.
With school districts across Illinois clamoring for more dollars, the state's gubernatorial candidates offering ways to generate billions of additional dollars for education and some political heavyweights still committed to a controversial tax swap plan, the stars may never be more aligned for school funding reform.
The recently approved state budget relies on a complicated tax swap that allows state officials to borrow nearly $11 billion to bridge the state's revenue shortfall, but could prevent Santa Clarita from taking advantage in the coming years of the projected growth in sales tax revenue.
Cruz Bustamante proposed a tax swap last week that would roll back the recent increase in the vehicle license fee and replace that revenue with higher taxes on alcohol, tobacco and the wealthy.