Friday, November 14, 2014

Color Me Surprised

People do not talk about taxes much, but I do think they are very important to consider if you are at the top marginal tax rate. There is a big difference between the taxes on a short term gain versus a long term gain, about 20 percentage points. So unless you enjoy paying extra freight to Uncle Sam, one should at least think about tax planning. And November is a pretty good time to be a-thinking.

It is funny, I had just assumed that I was going to be in a huge capital loss position because I took such a haircut on GTAT. Plus GNW blew up and I had some IPOs that didn't work out so hot (LMNS).  Guess what? I actually have substantial long term capital gains and am about flat on short term (actually a slight gain).

I dug in a bit to see what was happening. First, while I took a large hit when Gtat dropped from $15 to $1 - I had kind of forgotten that my basis for the majority of my holdings was $3.39.  So as far as capital losses went, it was just $2 per share, not $12 per share. Second, while GNW got hit, I have not sold those shares - so no realized loss (plus I bought a lot of those shares in single digits as well). Third, I had some big short term gains in 2014 to offset some of the IPO issues. I made a lot on HIMX and people may recall I sold NUS (a MFI holding) early on the China news at about $115 (I had bought at $40) so that was a huge ST gain.  I also sold some RIOM short term and made a very sizable gain.  So it hasn't been all bad. But from a tax planning standpoint, that means I should not be selling short term winners, unless I have some short term losers to offset them with (NADL perhaps)?

More later.

Oh, I did buy my new tranche. Fancy tables tomorrow.

NHTC and

No comments: