Home > Boards > Free Zone > A.I.M. > A.I.M. "In Depth" Q&A (AIMQ&A)

AIM Tax Consequences when starting with existing holdings.........

Public Reply | Private Reply | Keep | Last ReadPost New MsgNext 10 | Previous | Next
OldAIMGuy Member Profile
Member Level 
Followed By 114
Posts 14,295
Boards Moderated 6
Alias Born 01/29/02
160x600 placeholder
Top Company News of the Day
Axel Springer, whose $1 billion acquisition of Politico is expected to close next week, is also planning foreign-language editions.
Corn Rises as Farmers Hold on to Harvests -- Daily Grain Highlights
Front Month Nymex Natural Gas Fell 2.79% This Week to Settle at $5.4100 -- Data Talk
Front Month Nymex RBOB Gasoline Rose 5.08% This Week to Settle at $2.4864 -- Data Talk
CureVac Shares Down 12%
Housing Starts and Existing Home Sales on the Docket -- Data Week Ahead
Twitch Confirms Source Code Leak; Passwords Not Exposed
U.S. Oil-Rig Count Rises by 12 in Latest Week, Baker Hughes Says
Genentech: FDA Approves Tecentriq as Adjuvant Treatment for Certain Lung Cancer Patients
FTSE 100 Index Ends the Week 1.95% Higher at 7234.03 -- Data Talk
DAX Ends the Week 2.51% Higher at 15587.36 -- Data Talk
STOXX Europe 50 Index Ends the Week 2.50% Higher at 3628.05 -- Data Talk
EURO STOXX 50 Index Ends the Week 2.69% Higher at 4182.91 -- Data Talk
CAC 40 Index Ends the Week 2.55% Higher at 6727.52 -- Data Talk
STOXX Europe 600 Index Ends the Week 2.65% Higher at 469.39 -- Data Talk
Rising Demand Just One Factor in Inflation, Supply Chain Woes
Lockheed Martin Currently Up Nine Consecutive Days, On Track for Longest Winning Streak Since October 2017 -- Data Talk
FTSE Closes Up, But Loses Strength of Morning Opening
U.S. Consumer Sentiment Decreased in Early October -University of Michigan
Leonardo Says It Didn't Supply Airbus With Components From Embattled Subcontractor -- Update
VC Daily: Question: What Makes Decentralized Finance Attractive to Investors?
Caterpillar Names First Chief Sustainability and Strategy Officer
ITA Begins Operations as Italy's New National Flag Carrier
LumiraDx Shares Rise 13% Premarket on EUA Submission to FDA
OldAIMGuy Member Level  Saturday, 07/30/16 08:51:10 AM
Re: None
Post # of 367 
AIM Tax Consequences when starting with existing holdings.........

Q....................
Suggestions sought. When I took back control of my funds I felt that
the markets were overpriced. For that reason, I purposely bought light
with the intent of going a little heavier on any buy orders t ultimately
made to gradually bring my overall portfolio back into balance. This has
worked out fine, but one annoying result is that a number of my sell
points ended up being at or below my average cost now. My question is
how best to fix this? Is it a simple matter of adjusting my portfolio
controls upwards and if so any idea of how big a percentage? I can see
this being an ongoing issue when it comes to rebalancing the overall
portfolio. Any assistance would be appreciated.

M


A....................
Hi M, Re: AIM's lack of concern relative to "average price/share".........

AIM is designed to take profit on the most recent shares purchased, not
on average share cost. So, it is ambivalent about which batch of shares
are being sold or what their costs might be. Generally the gross LIFO
gain is about 20% to 40% depending upon what SAFE values and what
minimum trade size is chosen.

Even with a LIFO gain, the FIFO or average cost could be showing a loss
for a taxable transaction. AIM succeeds by compounding LIFO gains over
time. Eventually with each cycle your average cost/share will be lower
than your average selling price even if you started at a much higher
base cost.

When AIM sells, even at an average or FIFO loss, it will be selling at a
LIFO gain. It is replenishing the cash reserves with profits attached.
Since cash is the seed stock for the next planting, it is important to
recover the cash whenever it is possible regardless of the tax
consequences. If you sell shares at a tax loss, you will be able to use
those losses against any taxable gains you have during the same year.
This will be good for your overall portfolio even if that particular
holding seems to be doing something "wrong."

The best "Fix" is to just follow AIM's directions and sell regardless of
tax base cost when AIM wants a sale to occur.

Other opinions are welcome..............

Best regards,
Public Reply | Private Reply | Keep | Last ReadPost New MsgNext 10 | Previous | Next
Follow Board Follow Board Keyboard Shortcuts Report TOS Violation
X
Current Price
Change
Volume
Detailed Quote - Discussion Board
Intraday Chart
+/- to Watchlist
Consent Preferences