A.I.M. Users Bulletin Board

[OldAIMGuy]

Hi XT and TAB, AIM really doesn't give a hoot about which way we report our capital gains. However, from a pure cash flow point of view, we should care!

Those who are used to short term trading strategies are used to paying full boat on taxes. However, as a long term AIM user, I'm used to paying only at the 20% rate - well under what personal income gets taxed.

Uncle Sam really wants us to be consistent in whatever we do. So, years ago I started documenting all my sales on a FIFO basis. Gain or loss, that's the way they get reported. This has kept the vast majority of my transactions in the Long Term category (more than 85% and closer to 90% of sales in most years).

There's not much we can control in the world of investing. However, those few things that we can control we should. "Control the Control-ables!" We can control the cost of commissions as a percentage of each transaction. We can control our tax rate to a certain extent once we've rounded the first 12 months of ownership. We can't control where the market price is going to go on a security. So, I highly recommend that everyone do whatever they can to incur Long Term gains over Short Term. FIFO accounting tends to do this automatically.

Best regards, Tom