Reality Racing Inc (RRGI)

[Jerry12302]

I'm glad you were able to offset your gains (wish I had had some) with your RR loss. I don't think Gabe put his money into RR with the sole purpose of selling at a loss to offset some nice gains he may have had. First of all, they were restricted, and there's no indication that he was able to sell off any of his shares.

But, let's just soppose he could have, and did. From an accounting perspective, you would never invest in something knowing you will take a huge loss so you can offset your known gains, that is always a losing game. Being able to do it because you happened to lose your shirt is a good thing, but the only point in investing the money to begin with is in anticipation that you will realize gains. Remember, if he did sell his shares at a loss, he lost all the money he originally invested. He may have saved some taxes he would have had to pay, but he is out more than he could possibly have saved in taxes. Just do the math.

Anyway, mute point, he couldn't have sold those restricted shares. At some point, when he can sell them, he probably will, and he will use the loss to offset his gains that year. But I am sure that was never his original intent.

I'm with Scotch as far as believing that Gabe believed his investment would pay off, that he could have made RR work. I just think he bit off more than he could chew, not completely because he was inept, but more because of the accounting chaos of flotsam and jetsam that the Schaeffers left behind in their wake.