A losing stock can serve two very different purposes as year-end approaches. It can remain a bet on a business recovery, or become a way to reduce taxes on gains elsewhere. Investors don’t necessarily have to abandon the first to accomplish the second.
But there’s a catch. The IRS generally disallows a loss deduction when investors buy substantially identical securities within 30 days before or after selling. That creates an awkward stretch when a shareholder may still like a company but needs to keep some distance. Michael Burry’s latest reported trade puts the concept front and center.
