Money and Finance
Back in October I mentioned how we were going to be in a lower tax bracket this year compared to last year and most years going forward. We're dropping from the 28% tax bracket all the way to the 15% bracket because of much lower income this year. Going forward I expect us to be in the 25% tax bracket in most years so it makes sense to try and take advantage of the lower rates while we can. As such it would make sense to maximize our capital gains this year since we would pay 15% on short term gains and 0% on long term compared to the expected 25% and 15%.
However, there's still the opportunity to do some tax loss harvesting as well. The downside to doing tax loss harvesting though is that we'll get a bigger benefit out of it in the future when we have higher tax rates.
There's a lot of factors that go into the decision making process when considering whether the harvest tax losses or not.
One holding that I'm considering doing tax loss harvesting on is Union Pacific (UNP). I originally purchased 2 different lots of Union Pacific at much higher prices in June of this year at $101.81 and $97.49 per share cost basis', respectively. The current share price is down at $83.99 which means the position is sitting on a 15.87% short term capital loss. I have received one dividend payment though that helps to ease the sting slightly that bumps the total return to just a loss of 15.32%.
Read more »
- Portfolio Management: Considering Closing A Position
In a post last week I discussed our forecast tax situation for 2015. It's a weird place to be in as I don't expect us to normally be in the 15% tax bracket but there's a big benefit to that: qualified dividends and long term capital gains...
- Recent Sell
This afternoon I decided to go on and sell out of my position in Pfizer (PFE). I sold all shares at a price of $23.79 which netted a gain of $114.24 on the position. The shares had a YOC of 4.71% which was nice and they were due for a dividend increase...
- Recent Transaction
This is going in the Recent Buy section even though I didn't buy anything. I sold a put contract for Intel today expiring July 20, 2012. The strike price is for $25 and I sold it for $0.53 per share or $53. By selling this put contract I was able...
- Conocophillips Spinoff
Yesterday the ConocoPhillips spinoff into two companies went through. Phillips 66 (PSX) was spunoff from the parent company of Conoco (COP) to create value for shareholders. Phillips 66 is now comprised of the refining and pipeline business while Conoco...
- Why Tax Increases Could Lead To More Buybacks
(Note: Since this article was published, dividend tax rates were increased as expected, but in-line with long-term capital gains. This is a more positive outcome than the one described in the article where dividends and capital gains were taxed at different...
Money and Finance
Position in Focus: Union Pacific
Back in October I mentioned how we were going to be in a lower tax bracket this year compared to last year and most years going forward. We're dropping from the 28% tax bracket all the way to the 15% bracket because of much lower income this year. Going forward I expect us to be in the 25% tax bracket in most years so it makes sense to try and take advantage of the lower rates while we can. As such it would make sense to maximize our capital gains this year since we would pay 15% on short term gains and 0% on long term compared to the expected 25% and 15%.
However, there's still the opportunity to do some tax loss harvesting as well. The downside to doing tax loss harvesting though is that we'll get a bigger benefit out of it in the future when we have higher tax rates.
There's a lot of factors that go into the decision making process when considering whether the harvest tax losses or not.
One holding that I'm considering doing tax loss harvesting on is Union Pacific (UNP). I originally purchased 2 different lots of Union Pacific at much higher prices in June of this year at $101.81 and $97.49 per share cost basis', respectively. The current share price is down at $83.99 which means the position is sitting on a 15.87% short term capital loss. I have received one dividend payment though that helps to ease the sting slightly that bumps the total return to just a loss of 15.32%.
Read more »
- Portfolio Management: Considering Closing A Position
In a post last week I discussed our forecast tax situation for 2015. It's a weird place to be in as I don't expect us to normally be in the 15% tax bracket but there's a big benefit to that: qualified dividends and long term capital gains...
- Recent Sell
This afternoon I decided to go on and sell out of my position in Pfizer (PFE). I sold all shares at a price of $23.79 which netted a gain of $114.24 on the position. The shares had a YOC of 4.71% which was nice and they were due for a dividend increase...
- Recent Transaction
This is going in the Recent Buy section even though I didn't buy anything. I sold a put contract for Intel today expiring July 20, 2012. The strike price is for $25 and I sold it for $0.53 per share or $53. By selling this put contract I was able...
- Conocophillips Spinoff
Yesterday the ConocoPhillips spinoff into two companies went through. Phillips 66 (PSX) was spunoff from the parent company of Conoco (COP) to create value for shareholders. Phillips 66 is now comprised of the refining and pipeline business while Conoco...
- Why Tax Increases Could Lead To More Buybacks
(Note: Since this article was published, dividend tax rates were increased as expected, but in-line with long-term capital gains. This is a more positive outcome than the one described in the article where dividends and capital gains were taxed at different...