As long as we are discussing tax loss sales, I believe that under the current regulation we also have to consider long and short term loss. Now in the case of DNAP, If you bought 10,000 shares over a year ago for say .10 a share, You could sell today and realize about .014 cents a share. My lousy math skills say that is:
purchased 10000 * .10 = $1000.00 cost
Sold same 10000 * .014= $ 140.00 recovered
For a long term loss of 960.00, ignoring commissions. You would use this, I believe, to offset your $3000.00 long term gains in one of your stocks that has performed admirably. You of course would have to sell that stock to realize the gain.
Now if you have a bunch of DNAP that you bought within this calendar year, and you sell it this calendar year is it a short term loss and can be applied aginst your short term gains. I believe a problem can arise when you mix those long and short term gains because the tax treatment of a stock held over a year (Long term Capital Gain)is different than a short term gain.
I am not a wiz at this, (among many things) and I may be giving you my wishful thinking. If someone can supply a link to the straigh scoop, (in English, not IRS Mumbo Jumbo) maybe we can balance our portfolios without risking being left at the dock watching our dreamship disappearing over the horizon.
Another point to ponder, is somewhere I think it says your LONG TERM losses can be "saved" and you can lets say have $10,000.00 worth of losses and apply them at $3000.00 per year to offset taxes that might be due in say 05,06, and 07. You just can't apply them to "short term gains". Hopefuly none of us will be amassing these negative deductions.
If anyone knows better, please post here. I don't know this stuff, and I'm not an accountant or tax advice service. I have posted my understanding of a very complex tax rule that the IRS used devil knows how many lawyers and accountants to insure that none of us taxpayers are cheated. I probably have it all wrong, so I hope someone posting here can straighten out any misapprehensions I have.
Stakddek
