ISBN: 0-03-031529-8

NEWSWIRE - October 12, 2001

Source: "Harvest Losses Now for Tax Savings Later," by Karen Damato, The Wall Street Journal, October 12, 2001, page C1.

Synopsis: Many professional money managers are looking through clients' portfolios for losing positions to sell off. This year should be a particularly good year for the practice of tax-loss selling as managers and individual investors divest their losing positions in order to claim the capital loss on their tax forms. Realized losses can be used to offset realized gains on other positions. Further losses can be claimed up to the level of $3000. Investors can not repurchase the same security for a period of time (30 days for mutual fund sales) but can immediately replace the position with a fund or stock with similar attributes.

Discussion Questions:

1. What is tax-loss selling? Why is it so important in 2001?
2. What's the difference between a management and advisory firm and an investment company? How does each manage tax exposure for clients?
3. Tax-loss selling is a short-term tactic. How can the investor or portfolio manager make sure that longer-term investment objectives are not compromised?

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