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Old 12-22-2017, 05:11 PM
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Questions about an investment in SPXL

Does anyone have experience with SPXL or a similar leveraged EFT that can offer some validation of these points for taxable accounts? What I have found online has me questioning how to handle gains from this year.

- because of the daily re-balance the IRS regards any gains as short-term even if kept for over a year.

- taxes will be paid on any gains annually even if you don't sell the EFT

- because of the daily re-balance it is disqualified from in-kind redemptions


Thank you and Merry Christmas!



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Old 12-24-2017, 07:03 AM
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Join Date: Oct 2010
Posts: 5,085
Does anyone have experience with SPXL or a similar leveraged EFT that can offer some validation of these points for taxable accounts? What I have found online has me questioning how to handle gains from this year.

- because of the daily re-balance the IRS regards any gains as short-term even if kept for over a year.

- taxes will be paid on any gains annually even if you don't sell the EFT=======>No please read below.

- because of the daily re-balance it is disqualified from in-kind redemptions===> Basically, Investors need to understand the tax consequences of ETFs. when you sell an ETF, the trade triggers a taxable event. Whether it is a long-term or short-term capital gain or loss depends on how long the ETF was held. In the United States, to receive long-term capital gains treatment you must hold an ETF for more than 1 year. If you hold the security for 1 year or less, then it will receive short-term capital gains treatment. As with stocks, you are subject to the wash-sale rules if you sell an ETF for a loss and then buy it back within 30 days. A wash sale occurs when you sell or trade a security at a loss, and within 30 days after the sale you: Buy a substantially identical ETF, Acquire a substantially identical ETF in a fully taxable trade or Acquire a contract or option to buy a substantially identical ETF



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