tax swap

Tax swap

Swapping two similar bonds to receive a tax benefit.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
The most important issue facing the Batavia Public Library District concerns the recent tax swap referendum narrowly approved by voters.
Politicians would surely understand that hiking tax rates on those sources whose rates were reduced in the tax swap, as well as on carbon, would deliver more revenue for expanding government.
Gunn's proposal is a watered down version of a tax swap proposed earlier by Rep.
So even in the short run, the tax swap offered to middle-income families--bigger standard deductions in exchange for lost exemptions and itemized deductions--makes the president's middle-class-tax-cut claims an empty promise.
Some claim this tax swap will lift the financial burden off individual British Columbians and place it on businesses.
Total positively affected counties from the tax swap represent 40 percent of the U.S.
City, Austin school board look to save millions with tax swap plan, Austin American-Statesman
There are several types of bond swaps including quality swaps, yield swaps and tax swaps. We'll focus on the tax swap and explain how it reduces an investor's federal income tax liability.
A revenue-neutral "tax swap'' is a conservative, free-market approach where every dollar raised through a new tax on emissions would be 100 percent returned to taxpayers.
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. (The way this philosophy has manifested itself on the state level is in ongoing efforts, primarily driven by Republicans in places like North Carolina, to reduce or eliminate income taxation in favor of expanded sales taxes.)
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.