Take Advantage Of Long-Term Capital Gains
Knowledgeable investors say your best investment strategy is to buy stocks of good companies and hold on to them. If you follow this advice, chances are your portfolio contains a number of positions that you have owned for some time. Year end is a good opportunity to take a second look at these investments to see if they still fit into your long-term investment objectives. When doing your review, keep in mind that asets held for longer than one year qualify for the 20% long-term capital gains tax rate (for individuals in the 28% or higher tax bracket).

Before deciding to sell a position, remember that the tax consequences should be only one consideration. If a particular stock still fits into your long-range investments objectives, you should probably keep it in your portfolio even it qualifies for long-term treatment. The tax consequences, however, may tip the scales in favor of selling stocks that are not likely to help you acvieve your long-term objectives.

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Make Your Portfolio Better Suit Your Goals
While you're looking at your portfolio for opportunities to take advantage of the favorable long- term capital gains tax, it's wise to step back and take a fresh look at all your holdings. Have some investments met your price objectives? Have others fallen in value to the point you can sell them at a loss of offset gains? Are there better investments vehicles available to help you achieve your objectives? Year end is not just an opportunity to reduce your tax bill-it's also a chance to adjust your portfolio to better achieve your objectives.

If growth is your objective, avoid dividened-paying stocks. Remember, dividends are taxed as ordinary income in the year they're recieved. You may want to consider selling income stocks in favor of growth stocks that don't pay dividends. Not only do you avoid the income tax, but you'll be better positioned to acieve your long-term growth objective and enjoy tax-deferred growth until you decide to sell the stock.

A well-diversified portfolio is still your best strategy for managing your risk and returns, and now is good time to review the diversification of your portfolio. Take a look at your portfolio to make sure it contains the right combination of stocks, from high-tech to blue chip, to achieve your objectives and level of risk tolerance.

When you are eliminating only part of a position, you must spcify the shares you intend to sell. Otherwise, whenever you make a sale, the IRS assumes you are using the "first-in, first-out" method-the shares you've held the longest are the ones you are selling. If your strategy is to sell other shares, you must designate to your financial consultant which lot or lots of shares you're selling.

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Use Losses To Offset Gains
Buy low and sell high-that's the name of the gane for most investots. And what's morte exciting than making a hefty profit on the sale of a stock? However, that excitement can be tempered at tax time when you have to pay taxes on those gains. You can use losses to offset gains and reduce your tax burden. If, for example, if you sold one stock for a $2,000 gain another for a $2,000 loss, you would have no tax consequence. Additionally, you can use net losses to offset upto $3,000 of ordinary income in a single tax year. You can carry over net losses above this amount and use them to offset gains and/or ordinary income in subsequent years.

Don't Let the Wash Sale Rule Leave You High and Dry
Have a stock you like but that you could sell today at a loss? You might sell your shares, purchase additional shares in the same company and still take the loss on you taxes. Right? Sorry, but the wash sale rule prohibits you from selling a scurity at a loss and purchasing the same or a "substantially identical security" within 30 calendar days before or after the sale date that established a loss. In other words, you can employ this strategy as long as you don't purchase the new shares during the 61-day period surrounding, and including, the day you sold your stock at a loss

To avoid a wash sale rule violation, keep in mind:

• Nov. 30, 1999, is the last day to double up (purchase additional shares) if you want to sell a position on Dec. 31 and claim a loss in 1999.

• When you reinvest, make it a security that is not considered "substantially identicak".

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Make Your Portfolio Better Suit Your Goals
While you're looking at your portfolio for opportunities to take advantage of the favorable long- term capital gains tax, it's wise to step back and take a fresh look at all your holdings. Have some investments met your price objectives? Have others fallen in value to the point you can sell them at a loss of offset gains? Are there better investments vehicles available to help you achieve your objectives? Year end is not just an opportunity to reduce your tax bill-it's also a chance to adjust your portfolio to better achieve your objectives.

If growth is your objective, avoid dividened-paying stocks. Remember, dividends are taxed as ordinary income in the year they're recieved. You may want to consider selling income stocks in favor of growth stocks that don't pay dividends. Not only do you avoid the income tax, but you'll be better positioned to acieve your long-term growth objective and enjoy tax-deferred growth until you decide to sell the stock.

A well-diversified portfolio is still your best strategy for managing your risk and returns, and now is good time to review the diversification of your portfolio. Take a look at your portfolio to make sure it contains the right combination of stocks, from high-tech to blue chip, to achieve your objectives and level of risk tolerance.

When you are eliminating only part of a position, you must spcify the shares you intend to sell. Otherwise, whenever you make a sale, the IRS assumes you are using the "first-in, first-out" method-the shares you've held the longest are the ones you are selling. If your strategy is to sell other shares, you must designate to your financial consultant which lot or lots of shares you're selling.

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