Replies to post #72 on A.I.M. Users Bulletin Board (AIMUSERS)

[JSLyons]

'Morning guys,

Glad to hear zigzag has intrigued the AIM thread(s). I used it last week to weed out two AIM holdings that were underperforming in terms of Buys and Sells. Just not enough volatility for AIM.

I posted at SI my latest trade, a nostalgic sale triggered last night of 10 pct of inventory of ATMI. Company had an upbeat CC and release of earnings, suggesting first visibility of an upturn in wafer starts, which drives ATMI's supplies and service business.

I'd had the shares from long before my AIM days so it was a bit wrenching to sell them off, but the Front Office rules. LIFO gain of 35 pct didn't hurt morale either.

Best to all,
Jonathan

[extelecom]

Tab,
I think I am missing something too. I don't see how AIM has any determination of S/T or L/T capital gains. Those are a function of when you bought the shares versus when you sold them. One of the local radio Financial Planning programs I listen to on the weekend made the statement that the only thing people don't complain about in relation to money is having it! I have to admit I have never looked at any of my sales as S/T or L/T to determine which they were. Maybe that is why Uncle Sam loved me in 2000!

XT

[OldAIMGuy]

Hi TAB, Well maybe we're saying the same things, but not using the same definitions.

Long Term tax in the US on Cap Gain is currently 20% of the gain.

Short Term taxes are charged at the same rate as your usual income tax. So, if you are paying at the rate of 30% on your income, then that's what you'll pay on short term transactions (less than 12 months holding).

Now, LIFO is Last In, First Out. That means the last time you purchased shares, it's those shares that will be the ones you first sell. Unless you are only buying once a year, then these have a very high probablity of being Short Term Gains and therefore taxed at a rate nearly 50% higher than Long Term Gains.

FIFO is First In, First Out. This means if you started an AIM account in 1998 with 1000 shares, any sales you've had since then would be taken against that initial purchase. Subsequent purchases would be stacked up behind that first block and not sold until the initial block has been exhausted. Then it would be the next oldest shares in inventory, etc. Therefore, you would be usually selling inventory that's at least 12 months old except in unusual periods like 2000 - 2001. During such times it is possible to exhaust all older shares and then be working on only the newer stuff purchased.

Hope this helps,
Tom