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birb_cromble  1mo ago (text post)   991 thread views

Weekly Finance Thread

A weekly thread to discuss financial matters - from personal all the way up to global.

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Why would Trump be making 3,600 stock trades a quarter? I ask out of genuine curiosity as it's very high frequency indeed and doesn't match any model I have of how to invest outside of an algorithmic Jane St style approach.

(If this topic is considered too culture war related, though, please feel free to delete.)

Charitably, it could be tax loss harvesting. At high net worth and income strategies like that can get pretty intense.

Isn't there a dollar limit on the amount of tax loss harvesting you can really do in a year?

I think the limit applies to amount of losses that can be applied to other income, but there's no limit to the amount of stock loss that can be used to offset other stock gains, otherwise people with highly volatile portfolios would go bust very quickly, having to pay taxes on full amount of wins without offsetting them by losses. Imagine you had stock A and B, both worth $50, at the start of the year. At the end, A costs $1 and B costs $99. Your portfolio is still $100 but if you couldn't offset losses from A, you'd have to pay tax on profits on B even though you did not earn any profits. That does not sound sustainable.

For tax loss harvesting specifically there's a limit, but I'm going to go out on a limb and assume that somebody with Trump's net worth has access to tax avoidance schemes that don't even have names yet.

His current tax deal with the IRS excludes them from auditing Trump. So he has tax deals available to no one else.

No it does not. It only prohibits IRS from re-opening old cases, but not from auditing any new tax returns. Whatever press article you've read about this lied to you.

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