For the past six months, the
market rallyhas given most investors a break from
thinking much about losing stocks. Yet you may well still
have some stocks in your portfolio with losses -- and if you
do, you might want to think about selling them sooner, rather
than later.
It's never too early
It might seem silly to start thinking about
income taxesin September, but it can be a smart move. In
fact, by taking action before it even occurs to most people,
you can beat the rush and potentially reap some added
benefits.
If you own stocks that have dropped in value since you
bought them, there's a way to earn back at least some of what
you've lost. When you
sell those stocks at a loss, you're allowed to take the
resulting capital losses and apply them against any capital
gains you have on other investments. If you have more losses
than gains, then you can apply up to $3,000 of those losses
against other income, such as wages and interest and dividend
income.
With the rebound we've seen over the past six months, 2009
doesn't look like it'll repeat the experience most people
suffered with tax losses last year. But there are still quite
a few stocks that haven't seen their shares bounce back so
far this year:
Stock
YTD Return
Wal-Mart Stores (NYSE: WMT)
(10.7%)
H&R Block (NYSE: HRB)
(16.3%)
Vulcan Materials (NYSE: VMC)
(19.7%)
Citigroup (NYSE: C)
(29.8%)
Kroger (NYSE: KR)
(20.7%)
ExxonMobil (NYSE: XOM)
(11.9%) Continued... |