Tax and Yield

Question 1

Whats the equation for current yield

Answer 1

annual dollar amount/ Current market value

Question 2

Whats the formula for total return

Answer 2

income +/- gains or loss / cost basis

Question 3

How can capital losses be used for tax purposes

Answer 3

can offset capital gains
if losses exceed gains, up to 3k can be used to reduce ordinary income
Any losses past 3k can be carried over indefinitely

Question 4

Whats the term for carrying excess capital losses to the next year

Answer 4

carryforward losses

Question 5

What is a wash sale

Answer 5

purposly selling a sec at a loss to get the capital loss benefits but with the intent to repurchase the secs right away

Question 6

What is the min waiting time for wash selling to be able to use for tax purposes

Answer 6

30 days before or after the date establishing the loss

Question 7

If you repurchase the sec after a wash sell within 30 days can you use the losses for tax benefits

Answer 7

no

Question 8

Would warrants or rights usually be considered substantially identical for wash sales `

Answer 8

yes