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 ?
Robert Claridge, Wirral Campaign against the Bedroom Tax Selling city assets I READ in the property section of the ECHO (October 27) that the council has put the Municipal Building up for sale.
Also, ATI is a long-selling process and the opportunity for loss selling diminishes as the tax selling weeds out the initially underperforming stocks.
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.
This provides a strong incentive for an investor to delay realizing any losses, refraining from any year-end tax selling he would otherwise do.
Instead of tax selling Spear and his team are seeing unabashed window dressing in leaders such as Starbucks (NASDAQ:SBUX) and Autodesk (NASDAQ:ADSK).
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.
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.
Many stocks have suffered severely from year-end tax selling coupled with the general market decline.