For many investors, it can be tempting to think of one’s portfolio in terms of “gains” or “losses.” True, this is a central concept to understanding market behavior, but to truly maximize your investing knowledge, you also need to know about “unrealized gains,” “unrealized losses,” and how they can work to your advantage. As always, the following information is not intended as tax or legal advice. Any financial decision should be undertaken in consultation with your financial advisor and is not intended as tax or legal advice. Ready to learn more? Read on.
Put simply, an unrealized loss or gain is the change in market value of a stock from its purchase price. An “unrealized loss” occurs when a stock decreases after an investor buys it, but they have yet to sell it. An “unrealized gain” is when a stock increases in value, but an investor has yet to sell it. It really is as simple as that.
However, things become a bit more complicated if an investor sells stock that is currently valued higher, or lower, than their purchase price. When this occurs, the “unrealized” aspect becomes realized and renamed “capital gains” or “capital losses.”
Capital losses may be used to offset capital gains. If the losses exceed the gains, up to $3,000 of those losses may be used to offset the taxes on other types of income.This loss is limited to $3,000 per year, or $1,500 if married and filing a separate return. Should you have more than $3,000 in such capital losses, you may be able to carry the losses forward. You can continue to carry forward these losses until such a time that future realized gains exhaust them. Under current law, the ability to carry these losses forward is lost only on death.
Recently, you may have seen reports that a record-low number of homes are available for sale—roughly 1.03 million nationwide. If you compare that to the average number of homes for sale during the past 10 years, it’s no surprise that many hopeful homebuyers are having issues securing a home. But why exactly is the housing … Continue reading “Forces Driving the Housing Market”
It can be exhausting trying to keep up with the whims of Wall Street. Lately, the financial markets have been fixated on federal taxes and what may be proposed on Capitol Hill in the weeks and months ahead. Wall Street’s focus on taxes closely follows its attention on the 10-year Treasury yield. And it wasn’t … Continue reading “The Whims of Wall Street”
President Joe Biden introduced the much-anticipated American Jobs Plan, which outlines an approach to spend roughly $2.2 trillion on the nation’s infrastructure and other projects. As part of the legislative process, the Biden administration also laid out a proposal for paying for the domestic investment. The plan includes raising the corporate tax rate to 28% … Continue reading “Paying for the Infrastructure Bill”
Financially, many of us associate the spring with taxes – but we should also associate December with important IRA deadlines. This year, like 2020, will see a few changes and distinctions. December 31, 2021, is the deadline to take your Required Minimum Distribution (RMD) from certain individual retirement accounts.
There’s an old Wall Street maxim that says, “markets climb a wall of worry.” And these days, there’s plenty to worry about with the trend in long-term interest rates and bonds.
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