
In today’s market, experiencing a fluctuation in your investments, whether up or down, may be a common occurrence. As the market moves, some investors look for potential investment and income tax opportunities.
One such possibility is to realize income tax benefits by taking a capital loss when an investment drops in value, relative to the initial investment. This is by no means a complicated strategy, but what if the investor wishes to re-establish his or her position in the investment immediately after the loss is realized? There may be a trap waiting for those who are trying to garner an income tax benefit from this type of sale.
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