Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[mongo]

OK, newbie question here, but this is an investor's thread, so I *think* it is On Topic: I have been considering selling some of my stock in my Ally account. Some of the shares were bought >1 year ago, and would sell at a profit. But, some other of the shares were purchased <1 year ago, and would sell at a loss. So, does the IRS consider the sale as just one sale, or is each tranche taxed separately? Does the loss of the more recent shares, if sold at the same time, offset some of the profits from the older shares? Or, am I taxed fully on the profits of the older shares, and the sale of the newer shares (a loss) are taxed at $0?

Ally tracks your buy lots vs your sell, you need to specify whether to use FIFO (first in first out), LIFO (last in first out), highest cost or such. This burned me on my TDAmeritrade account because my short term trades matched against my long term holdings and I lost a lot of my long term capital gains coverage.

 

[BornToFly]

Are we seeing some "sell the news" now that the stimulus passed the Senate?

Maybe. Terrible unemployment report coming out tomorrow. US Deaths going to skyrocket. We should be red the rest of the week....

 

[UncaNed]

OK, newbie question here, but this is an investor's thread, so I *think* it is On Topic: I have been considering selling some of my stock in my Ally account. Some of the shares were bought >1 year ago, and would sell at a profit. But, some other of the shares were purchased <1 year ago, and would sell at a loss. So, does the IRS consider the sale as just one sale, or is each tranche taxed separately? Does the loss of the more recent shares, if sold at the same time, offset some of the profits from the older shares? Or, am I taxed fully on the profits of the older shares, and the sale of the newer shares (a loss) are taxed at $0?

I think WASH sale rules come into play. That could be an enormous tax liability which I learned about the hard way.

 

[Nocturnal]

Well they will get hammered for a few months. The good news about retaining high income earners is that they are the ones who have disposable income for eating out and enjoying trips. The sector is extremely agile and bounce back before you even know it. This is not one of those domino effects from the last recession in which some manufacturing plant went under in a town that crippled the local economy. One restaurant goes under, another take its place. Besides Tesla, who had the balls to buy that Numi plant and decide to replace build cars during the last financial crisis? No body.

Yeah. My thesis for this event was it would be nasty, but a relatively short recession due to those reasons and massive stimulus. People are going to go nuts with spending once the quarantines are over. Trips, dining out, buying massive quantities of supplies for the next event (and hopefully solar).

OK, off my rant, but I think you all know what I mean about this unintended consequence of ordering on-line.

It's also a huge hassle dealing with those boxes. I expect as Amazon and others bring more delivery in house they will use plastic bins or something similar and just drop off your order. I also want Costco to change their packing. I buy cookies in 4 packs which are in plastic, which are then inside boxes, which are then in another big box. Stupid.

Sustainability is needed all over. Tesla is just one part.

 

[Mkorpal]

I think WASH sale rules come into play. That could be an enormous tax liability which I learned about the hard way.

That isn’t a wash sale.

 

[Fobble]

I think WASH sale rules come into play. That could be an enormous tax liability which I learned about the hard way.

That was not wash sale. Wash sale is selling a stock at substantial loss, then buy back at lower price within 30 days. Wash sale is not qualified for capital loss.

 

[goinfraftw]

Maybe. Terrible unemployment report coming out tomorrow. US Deaths going to skyrocket. We should be red the rest of the week....

I believe this is the running report (unemployment insurance claims) updated from last week, the 19th: https://www.dol.gov/ui/data.pdf

Please, let me know if this is not what you're referring to.

 

[Unpilot]

I'm going to market time this bad boy...it goes up I buy...it goes down I sell...do I have this right?

 

[Nocturnal]

Huh. This rocket-like rise baffles me. Have people realized a growth company is a better place to be in a crisis that affects revenues, or what? Any ideas? I actually bought back most of my hedge-sold shares on Monday, so I couldn't have timed it better, but I wasn't expecting this and it's freaking me out a little.

I think because the first waves of panic selling are over and the stimulus is done, people are actually looking at companies on their own merits. Obviously Tesla is a big growth company, with lines of business outside of auto and with a better debt to cash ratio than their competitors. Not to mention that GM's and other's plans to invest billions into EVs is looking very unlikely at this point.

This event is going to drastically increase Tesla's share of the market.

I'm going to market time this bad boy...it goes up I buy...it goes down I sell...do I have this right?

Make sure you credit that strategy to guy brain trust at #tslaq They invented it.

 

[ggr]

Yes, but check with your broker about exercising your call. Some brokers will do it automatically at option expiration as long as it's in the money, others require you to exercise the option yourself (should have a link/button for you to click on their website).

Alternatively, you could also sell the call (if there's any time-value left in it) and add the proceeds to your 35k to buy your 100 shares. Usually DITM (deep in the money) calls have almost no time-value left in them, so it's better to do this sooner rather than later.

I think by 2022 he won't have to worry about automatic execution.

 

[Incredulocious]

That was not wash sale. Wash sale is selling a stock at substantial loss, then buy back at lower price within 30 days. Wash sale is not qualified for capital loss.

That’s not accurate: a wash sale is selling shares at any loss (substantial or not) and having bought shares (at any price, higher or lower) of same company within 30 days before or after sale.

 

[MartinAustin]

Tesla got a couple of positive plugs during a CNBC interview with the CEO of Medtronic. Tesla are "fast ramping up" to produce a ventilator that is not Medtronic's current state-of-the-art model.

 

[Incredulocious]

OK, newbie question here, but this is an investor's thread, so I *think* it is On Topic: I have been considering selling some of my stock in my Ally account. Some of the shares were bought >1 year ago, and would sell at a profit. But, some other of the shares were purchased <1 year ago, and would sell at a loss. So, does the IRS consider the sale as just one sale, or is each tranche taxed separately? Does the loss of the more recent shares, if sold at the same time, offset some of the profits from the older shares? Or, am I taxed fully on the profits of the older shares, and the sale of the newer shares (a loss) are taxed at $0?

Not a wash sale. When you sell shares, you normally report the overall basis and overall net profit or loss as one transaction even for shares that were bought at different times/prices. However, with a mix of short and long term shares, you do have to separate them and report short and long term gains or losses separately as they’re taxed at different rates. The losses of one can and will be deducted against the gains of the other. But there’s a limit to how much of your short and long term losses can be applied to your normal income each year.

Long-Term Vs. Short-Term Capital Loss Deduction

 

[Fobble]

That’s not accurate: a wash sale is selling shares at any loss (substantial or not) and having bought shares (at any price, higher or lower) of same company within 30 days before or after sale.

Semantically, you are right, but who in the right mind to sell on tiny loss and buy back for tiny gain within a short period? The whole idea of wash sale is trying to claim the huge loss, and reset the position aiming for future gain, and the regulation prohibits traders to take that advantage.

 

[UnknownSoldier]

The TSLA roller coaster is a fun ride indeed.

"You must be this tall to ride this ride"

Remember that this is a bear market, and that stocks do go up during bear markets. Don't doubt ur vibe.

 

[Incredulocious]

Semantically, you are right, but who in the right mind to sell on tiny loss and buy back for tiny gain within a short period? The whole idea of wash sale is trying to claim the huge loss, and reset the position aiming for future gain, and the regulation prohibits traders to take that advantage.

Who? People who are not planning or managing their trades well. Sorry for the correction but I didn’t want anyone to think that the size of the loss makes any difference in whether you have to record the loss as a wash sale for tax purposes.

 

[Todd Burch]

I think markets are a leading indicator. Once news of the pandemic spreading in the US broke, markets tanked, even though there were just a few cases. Even though we are not at the peak medical crisis, I think the economic reality is pretty much baked in at this point. Investors have had a chance to think about the impacts, how the stimulus plays into this, etc...and markets are now a leading indicator of a recovery. The discussion of 2M new unemployment claims has been in the news for days, so it will not be shocking when it arrives tomorrow.

Disclaimer: I am a moron, just like everyone else.

 

[Mkorpal]

Semantically, you are right, but who in the right mind to sell on tiny loss and buy back for tiny gain within a short period? The whole idea of wash sale is trying to claim the huge loss, and reset the position aiming for future gain, and the regulation prohibits traders to take that advantage.

Actually, the whole point of the wash sale rules is to prevent selling on December 30th to claim a loss on the tax year and buying back on Jan 2nd for essentially the same price.

 

[Nocturnal]

Tesla got a couple of positive plugs during a CNBC interview with the CEO of Medtronic. Tesla are "fast ramping up" to produce a ventilator that is not Medtronic's current state-of-the-art model.

Ford quickly put out a plan to build respirators based on F150 components. I'll be curious to see how they stack up against Tesla and GM.

 

[Toumal]

Ford quickly put out a plan to build respirators based on F150 components. I'll be curious to see how they stack up against Tesla and GM.

Would be only consequential if they were using a gasoline engine to run the pump.