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Tax-Loss Selling

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Tax-Loss Selling
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.

tax-loss selling
The sale of securities that have declined in value in order to realize losses that may be used to reduce taxable income. Tax-loss selling occurs near the end of a calendar year so that the loss can be used in that tax year to offset ordinary income or gains on other security transactions. Thus, tax-loss selling occurs mainly among stock that has declined in price. Compare tax selling.


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Between booking profits (to bump up bonuses), a very long and very tired liquidity-induced rally rolling over, tax-loss selling the last week of October and tax avoidance selling, the stars were finally all aligned to give long suffering bears a decent week.
Looking ahead to next week, trading activity should lighten up as many on Wall Street begin to take extended year-end holiday vacations," he said citing possible cessation of selling pressure from year-end tax-loss selling and hedge fund redemptions.
Another way to reduce taxes is to do some tax-loss selling to offset any potential capital gains.
 
 
 
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