Enzolytics Inc (ENZC)

[NattyWhite]

This reply is not just to dyno anyone can comment. Because there were a couple post about this i replied to the most recent.

There could be a situation where having a short term loss is beneficial vs a long term loss! I read the board often but rarely post. I love playing devils advocate for the sake of learning so hear me out.
Its been a few years since my last tax class but what i remember is this:

To calculate taxable gains you first net each these two separately:

Step 1:
Long term gains less lg term losses = net long (+/-)

Short term gains less Short term losses = net short (+/-)

Step 2: net the long and the short for your final gain/loss.

Scenario 1: net loss. It does NOT matter if long or short.

Scenario 2: net gain.
It matters if your net gain is long or short.

-Short gain taxed at regular tax rate
-Long term capital gains taxed at special rates- 0%, 15%, or 20%

Therefore it is preferable to end up with long term gains vs short term gains bc your long term rate is lower.

Selling a loss early to make it short term loss can result in being left with long term gains vs the less desirable short term gain.

Ill make up a scenario to illustrate:

$5 worth of losses are in question. Do you sell short term or long?

Option 1 sell short term (365 days or less)
Option 2 sell long term (365 days or more)

Facts: i have $4 in long term gains and $5 in short term gains
I have a loss of $3 that i need to decide whether to sell short or wait until long term.

1- sell short term
$4 lg gain - 0 losses = net $4 Lg gain
$5 sh gain - $3 losses= net $2 Sh gain

2- sell long term
$4 lg gain - $3 loss= $1 net Lg gain
$5 sh gain - 0 loss = $5 sh gain

Both pay taxes on $6 of gains but option 1 pays less tax due to more of their gains being long term

Selling a loss short term does not always matter but there is a scenario that is beneficial to sell a loss before it becomes long term…