Part 3 of my article on harvesting tax losses covers three more recent sells. I'm trimming these stocks rather because I'm hoping to buy back shares in 2019 to retain the dividends and to lower my average cost basis.Part 1 covered Ford (F), while Part 2 covered recent sells on Gilead Sciences (GILD), KB Home (KBH), and Nvidia (NVDA). I trimmed GILD, but closed KBH and NVDA because I'm no longer interested in owning those stocks.
In the conclusion of this article, I'll provide a summary of all the trades reported in this article.
Today I'm presenting three additional recent sells. The first is of International Business Machines (IBM), a high-yielding dividend growth stock that has been performing poorly for several years. I sold 20 shares and keeping 10 shares.
I'm also trimming Qualcomm (QCOM) and Williams Sonoma (WSM) — QCOM by 200 shares (retaining 100), and WSM by 100 shares (retaining 100).
Trimming IBM
I first invested in IBM in 2014, citing the company's ability to generate free cash flow and its impressive foundation of intellectual property. Unfortunately, IBM has been struggling for years, and its latest earnings report again showed declining revenue.
Before selling 20 shares my average cost basis was $169.85, which means my position was down about 30%.
IBM Trade Summary
| 2014-07-11 | Bought 14 shares of IBM at $187.91 per share: | $ | 2,630.72 |
| 2014-09-10 | Dividends on 14 shares at $1.10 per share: | $ | 15.40 |
| 2014-12-10 | Dividends on 14 shares at $1.10 per share: | $ | 15.40 |
| 2015-01-27 | Bought 6 shares of IBM at $154.04 per share: | $ | 924.24 |
| 2015-03-10 | Dividends on 20 shares at $1.10 per share: | $ | 22.00 |
| 2015-06-10 | Dividends on 20 shares at $1.30 per share: | $ | 26.00 |
| 2015-09-10 | Dividends on 20 shares at $1.30 per share: | $ | 26.00 |
| 2015-12-10 | Dividends on 20 shares at $1.30 per share: | $ | 26.00 |
| 2016-03-10 | Dividends on 20 shares at $1.30 per share: | $ | 26.00 |
| 2016-06-10 | Dividends on 20 shares at $1.30 per share: | $ | 28.00 |
| 2016-09-12 | Dividends on 20 shares at $1.40 per share: | $ | 28.00 |
| 2016-12-12 | Dividends on 20 shares at $1.40 per share: | $ | 28.00 |
| 2017-03-10 | Dividends on 20 shares at $1.40 per share: | $ | 28.00 |
| 2017-06-12 | Dividends on 20 shares at $1.40 per share: | $ | 30.00 |
| 2017-09-11 | Dividends on 20 shares at $1.50 per share: | $ | 30.00 |
| 2017-12-11 | Dividends on 20 shares at $1.50 per share: | $ | 30.00 |
| 2018-03-12 | Dividends on 20 shares at $1.50 per share: | $ | 30.00 |
| 2018-06-09 | Dividends on 20 shares at $1.50 per share: | $ | 31.40 |
| 2018-09-10 | Dividends on 20 shares at $1.57 per share: | $ | 31.40 |
| 2018-12-11 | Dividends on 20 shares at $1.57 per share: | $ | 31.40 |
| 2018-12-19 | Sold 20 shares of IBM at $119.48 per share: | $ | 2,389.62 |
| Capital Loss: | $ | 1,165.34 | |
| Dividends Received: | $ | 483.00 | |
Commissions/Fees/Taxes:
|
$
|
1.03
| |
Net Loss:
|
$
|
683.37
|
When accounting for dividends, I made a net loss of 19% on my original investment — a loss of about 4.5% annualized.
Here's a trade summary of transactions and dividends related to my remaining 10 shares:
| 2015-01-27 | Bought 10 shares of IBM at $154.04 per share: | $ | 1,540.39 |
| 2015-03-10 | Dividends on 10 shares at $1.10 per share: | $ | 11.00 |
| 2015-06-10 | Dividends on 10 shares at $1.30 per share: | $ | 13.00 |
| 2015-09-10 | Dividends on 10 shares at $1.30 per share: | $ | 13.00 |
| 2015-12-10 | Dividends on 10 shares at $1.30 per share: | $ | 13.00 |
| 2016-03-10 | Dividends on 10 shares at $1.30 per share: | $ | 13.00 |
| 2016-06-10 | Dividends on 10 shares at $1.30 per share: | $ | 14.00 |
| 2016-09-12 | Dividends on 10 shares at $1.40 per share: | $ | 14.00 |
| 2016-12-12 | Dividends on 10 shares at $1.40 per share: | $ | 14.00 |
| 2017-03-10 | Dividends on 10 shares at $1.40 per share: | $ | 14.00 |
| 2017-06-12 | Dividends on 10 shares at $1.40 per share: | $ | 15.00 |
| 2017-09-11 | Dividends on 10 shares at $1.50 per share: | $ | 15.00 |
| 2017-12-11 | Dividends on 10 shares at $1.50 per share: | $ | 15.00 |
| 2018-03-12 | Dividends on 10 shares at $1.50 per share: | $ | 15.00 |
| 2018-06-09 | Dividends on 10 shares at $1.50 per share: | $ | 15.70 |
| 2018-09-10 | Dividends on 10 shares at $1.57 per share: | $ | 15.70 |
| 2018-12-11 | Dividends on 10 shares at $1.57 per share: | $ | 15.70 |
| Unrealized Loss on 10 shares @ $110.94 per share: | $ | 430.99 | |
| Dividends Received: | $ | 226.10 | |
Commissions/Fees/Taxes:
|
$
|
0.00
| |
Net Unrealized Loss:
|
$
|
204.89
|
Trimming QCOM
I first bought shares of QCOM in April 2015, adding to and trimming my position several times since. Before selling 200 shares my average cost basis was $62.94, which means my position was down about 8%.
When accounting for dividends, I made a net loss of 7.2% on my original investment — a loss of about 3.5% annualized.
The 100 QCOM shares I retained have a cost basis of $53.06 per share. I probably won't be able to reduce my average cost basis when I buy back shares in 2019. QCOM's next ex-dividend date is not until late February 2019, so I have plenty of time after 20 January 2019 to buy shares.
Here's a trade summary of transactions and dividends related to my remaining 100 shares:
I acquired my position in WSM due to an options assignment.
The multi-channel specialty retailer of home products slumped after announcing Q3 earnings, despite a year-over-year increase in adjusted EPS of 10.5% and revenue growth of 4.4% over Q3-2017. The company's comparable brand revenue growth fell short of analysts’ expectations, growing only 3.1% compared to analysts’ expectation of 4.2%.
Overall I made a net loss of 16.7% on my investment.
The 100 WSM shares I retained have a cost basis of $60.00 per share. I should be able to reduce my average cost basis when I buy back shares in 2019. WSM's next ex-dividend date is 24 January 2019, so I only have three days to buy shares (21 January – 23 January 2019).
Here's a trade summary of transactions and dividends related to my remaining 100 shares:
QCOM Trade Summary
| 2016-11-25 | Bought 200 shares of QCOM at $67.88 per share: | $ | 13,576.00 |
| 2016-12-16 | Dividends on 200 shares at 53¢ per share: | $ | 106.00 |
| 2017-03-22 | Dividends on 200 shares at 53¢ per share: | $ | 106.00 |
| 2017-06-21 | Dividends on 200 shares at 57¢ per share: | $ | 114.00 |
| 2017-09-20 | Dividends on 200 shares at 57¢ per share: | $ | 114.00 |
| 2017-12-15 | Dividends on 200 shares at 57¢ per share: | $ | 114.00 |
| 2018-03-21 | Dividends on 200 shares at 57¢ per share: | $ | 114.00 |
| 2018-06-20 | Dividends on 200 shares at 62¢ per share: | $ | 124.00 |
| 2018-09-26 | Dividends on 200 shares at 62¢ per share: | $ | 124.00 |
| 2018-12-20 | Dividends on 200 shares at 62¢ per share: | $ | 124.00 |
| 2018-12-19 | Sold 200 shares of QCOM at $57.83 per share: | $ | 11,566.00 |
| Capital Loss: | $ | 2,010.00 | |
| Dividends Received: | $ | 1,040.00 | |
Commissions/Fees/Taxes:
|
$
|
8.17
| |
Net Loss:
|
$
|
978.17
|
When accounting for dividends, I made a net loss of 7.2% on my original investment — a loss of about 3.5% annualized.
The 100 QCOM shares I retained have a cost basis of $53.06 per share. I probably won't be able to reduce my average cost basis when I buy back shares in 2019. QCOM's next ex-dividend date is not until late February 2019, so I have plenty of time after 20 January 2019 to buy shares.
Here's a trade summary of transactions and dividends related to my remaining 100 shares:
| 2017-02-07 | Bought 100 shares of QCOM at $53.06 per share: | $ | 5,306.00 |
| 2017-03-22 | Dividends on 100 shares at 53¢ per share: | $ | 53.00 |
| 2017-06-21 | Dividends on 100 shares at 57¢ per share: | $ | 57.00 |
| 2017-09-20 | Dividends on 100 shares at 57¢ per share: | $ | 57.00 |
| 2017-12-15 | Dividends on 100 shares at 57¢ per share: | $ | 57.00 |
| 2018-03-21 | Dividends on 100 shares at 57¢ per share: | $ | 57.00 |
| 2018-06-20 | Dividends on 100 shares at 62¢ per share: | $ | 62.00 |
| 2018-09-26 | Dividends on 100 shares at 62¢ per share: | $ | 62.00 |
| 2018-12-20 | Dividends on 100 shares at 62¢ per share: | $ | 62.00 |
| Unrealized Gain on 100 shares @ $54.85 per share: | $ | 179.00 | |
| Dividends Received: | $ | 467.00 | |
Commissions/Fees/Taxes:
|
$
|
0.50
| |
Net Unrealized Gain:
|
$
|
645.50
|
Trimming WSM
I acquired my position in WSM due to an options assignment.
The multi-channel specialty retailer of home products slumped after announcing Q3 earnings, despite a year-over-year increase in adjusted EPS of 10.5% and revenue growth of 4.4% over Q3-2017. The company's comparable brand revenue growth fell short of analysts’ expectations, growing only 3.1% compared to analysts’ expectation of 4.2%.
WSM Trade Summary
| 2018-11-16 | Bought 100 shares of WSM at $60.00 per share: | $ | 6,000.00 |
| 2018-12-19 | Sold 100 shares of WSM at $49.98 per share: | $ | 4,998.00 |
| Capital Loss: | $ | 1,002.00 | |
| Dividends Received: | $ | 0.00 | |
Commissions/Fees/Taxes:
|
$
|
1.08
| |
Net Loss:
|
$
|
1,003.08
|
Overall I made a net loss of 16.7% on my investment.
The 100 WSM shares I retained have a cost basis of $60.00 per share. I should be able to reduce my average cost basis when I buy back shares in 2019. WSM's next ex-dividend date is 24 January 2019, so I only have three days to buy shares (21 January – 23 January 2019).
Here's a trade summary of transactions and dividends related to my remaining 100 shares:
| 2018-11-16 | Bought 100 shares of WSM at $60.00 per share: | $ | 6,000.00 |
| Unrealized Loss on 100 shares @ $47.00 per share: | $ | 1,300.00 | |
| Dividends Received: | $ | 0.00 | |
Commissions/Fees/Taxes:
|
$
|
0.00
| |
Net Unrealized Loss:
|
$
|
1,300.00
|
Conclusion
This three-part article presented seven recent sells to harvest tax-losses.
Two of the sells are closing trades, meaning I don't want to reinstate these positions after the wash-sale restriction period ends. I'm hoping to reestablish the other five positions in time to receive the next dividend payments.
Closing or trimming positions for a loss is not a pleasant affair, but I'm offsetting some of the $21,000 in capital gains earned in 2018. Specifically, these trades represent capital losses totaling $13,028.80:
| Trimmed F by 1,900 shares for a net loss of: | $ | 3,847.70 | |
| Trimmed GILD by 200 shares for a net loss of: | $ | 1,934.34 | |
| Closed KBH (sold 300 shares) for a net loss of: | $ | 2,874.12 | |
| Closed NVDA (sold 30 shares) for a net loss of: | $ | 1,714.27 | |
| Trimmed IBM by 20 shares for a net loss of: | $ | 683.37 | |
| Trimmed QCOM by 200 shares for a net loss of: | $ | 978.17 | |
| Trimmed WSM by 100 shares for a net loss of: | $ | 1,003.08 | |
| Total Capital Losses: | $ | 13,028.80 | |
| Ford (F): |
before 28 January 2019
|
| Gilead Sciences (GILD): |
before 14 March 2019
|
| International Business Machines (IBM): |
before 7 February 2019
|
| Qualcomm (QCOM): |
before 26 February 2019
|
| Williams-Sonoma (WSM): |
before 24 January 2019
|
I won't reinvest in KBH or NVDA as these stocks have tiny yields and, for the time-being, seemingly lower growth prospects.
Hi DivGro
ReplyDeleteHere in Poland we can deduct 50% of losses (up to 5 years back).
example:
2015: 8000 loss
2016: 3000 loss
2017: 5000 loss
2018: 20000 profit
tax= (20000 - 0.5*(8000+3000+5000))*19% = 12000*19% = 2280
Is it the same in the USA?
In the USA, you can offset capital gains with capital losses in the same year. If your losses exceed your gains, you can offset an additional amount if you have other income. I think the limit is $3,000. You can then "carry forward" additional losses to subsequent tax years.
DeleteI've made a few sales myself. Some to tax loss harvest, others because I've soured some on the company and others because the I just wanted to start "trimmming the fat" and reduce my number of holdings to get more concentrated.
ReplyDeleteThanks for commenting -- yeah, I've soured on few of these myself... And, as I mentioned in the article, sometimes you just want to "clean house" a bit!
DeleteThe market sure is going a little nuts... I'm wondering where the bottom is going to be found!