Thursday, October 13, 2016

Tax Loss Sale

Monday was Columbus Day.  This is a federal holiday which my employer observed but the stock market was open.  I took the opportunity to sell my position in ConocoPhillips (COP), a large American oil producer.  This was another of my ill-fated bets on peak oil so I realized a loss.  This will save me some money on my 2016 taxes. When I made a similar tax sale last year I estimated I would recover 25% of my loss.  This turned out to be low, according to TurboTax my actual recovery was about 32%.  I am unsure why the savings were in excess of the nominal statutory rates, perhaps my marginal rate is actually higher because I am subject to some phase outs of exemptions or credits. In any case this makes tax loss selling an even better idea.  I still find it painful however and had been putting it off.

I didn't reinvest the sale proceeds.  I had considered buying some more VDE (Vanguard's energy sector ETF) waiting 35 days (to avoid the wash sale rule) and then selling my current position in VDE (which also has an unrealized loss) and repurchasing the COP so as to maintain my current exposure to the energy sector (more or less) while realizing both losses. However I decided to just take the money out of the market for the moment.  My short term timing was okay as the COP is currently down some since I sold.


  1. ....Good, the money is out of the market. Time to spend it!

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