Magazine article Medical Economics

Money Management Q&A

Magazine article Medical Economics

Money Management Q&A

Article excerpt

Avoid this wash out when you sell shares

Two weeks ago I sold shares of a stock at a loss, based on misinformation I had read on the Internet. Yesterday, after learning of the error, I bought back the shares. But a colleague says f can't claim the /oss on my taxes. Why not?

You've run afoul of the wash sale rule, which prohibits claiming a loss on the sale of a security if you buy the same one or a "substantially similar" one within 30 days before or after the sale. But you won't completely lose out. Instead of deducting the loss on your 2007 return, you'll add it to the cost of the new shares you bought. That will raise your tax basis for those shares and reduce any gain (or increase any loss) when you eventually sell them.

Getting discounts on mutualfund loads

I may invest $20,000 in a mutual fund my son owns shares in. ft charges a 4 percent load, but my son says I should talk to my broker to see if I'd qualify for a breakpoint. What's he talking about?

Many load mutual fund companies lower the upfront charge once the overall amount invested in a fund or family of funds reaches a certain level, called a breakpoint. For instance, your fund may charge 4 percent if you invest up to $25,000 but only 3.25 percent on investments between $25,000 and $50,000. Even if your initial investment falls below the breakpoint you might still get the discount, because investments by your son and other family members may be factored in. So may investments made in that fund through other brokerages, college savings accounts, or retirement accounts. Each mutual fund sets its own breakpoints, so talk with your broker to make sure you understand the fund's rules and get any discounts you're entitled to.

When a free lunch isn't really free

Lately I've been getting invitations to free retirement investment seminars that include lundi at a fine restaurant and speakers with impressive credentials. …

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