How fine is Wine?

[AKR]

https://www.bloomberg.com/gadfly/articl ... colade-ipo

[tim]

My investment in Constellation Brands did very well over the last year. In fact I sold it at the end of 2016 to record the profits for tax purposes.

[JimHow]

Just curious, why would you want to show profits at the end of a tax year for tax purposes?
Wouldn't you want to show profits after Jan 1st, so that you don't have to pay taxes on those profits til 2018?
In fact, if you are making profits, why would you sell at all (at least for tax reasons)?
For tax purposes, wouldn't you sell if you were taking a loss?
I'm just a country lawyer from Maine.

[Tom In DC]

Depends on how other investments did over the year.

[JimHow]

So if there is an otherwise loss for the year, it is better to sell, take the profit on your investment in the year that you are otherwise going to have a loss, get the taxable income back up to zero or some other tax-favorable level, so you don't have to pay taxes on the gain. Got it.

[Tom In DC]

Exactly.

[JimHow]

Timmy being so Trumpian!

[AKR]

Especially if one is older. Capital Loss Carryforwards can't be used by an estate to reduce income after death.

Younger people can generally just sit on piles of cap losses, and let those reduce their income taxes for a while, since ordinary income tax rates are usually higher than cap gains rates.

Everyone needs to do their part to keep government lean and healthy, by avoiding feeding the beast too much fats, sugar, and taxes.

========

Personally those agricultural/fashion dependent businesses don't seem very attractive to me. I'd rather just have Brown Forman, or Diageo or something.

[AlohaArtakaHoundsong]

Losses are for losers.

[Tom In DC]

Not when buying a company for $1 if the company happens to have $100 million in losses on the books.

One could also look at the carbon trade - everyone wins when Russia sells credits from before the collapse of the empire.

[AlexR]

I'm glad I have so little money to invest that these things go over my head .

Alex R.

[tim]

Slightly different in my case, but yes, because my capital gains tax is low this year due to my lack of regular income, and I held the stock long so it is not counted as income. So if I sell this year (or actually last year in this case), I pay less tax than if I sold in a year when I have a higher capital gains tax rate.