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You do not trade 1 stock for another, you have to sell it, wait t+2 days for it to clear, then use those proceeds to buy the other stock. It's not the same in a
by dclaw 5y ago
You do not trade 1 stock for another, you have to sell it, wait t+2 days for it to clear, then use those proceeds to buy the other stock. It's not the same in any manner.
- novok 5y agoThat is just a side effect about how certain exchanges work, you can still trade one good for another without using cash, and it's a taxable event because your 'liquidating' property. It's known as bartering income: https://www.irs.gov/taxtopics/tc420 https://www.irs.gov/taxtopics/tc420
- dclaw 5y agoVery true, it's mainly an exchange thing. Thanks for pointing that out.
- garmaine 5y agoIf I have a stock certificate for AAPL, and you have a TSLA stock certificate (I’m talking about actual paper certificates), we can trade them and it is a taxable event.
- dclaw 5y agoAhh man, you are indeed right. But I seriously haven't seen a paper stock certificate in person this century.
- voidfunc 5y agoI have some Disney ones from the 90s. They are actually very very nice artwork.
- garmaine 5y agoDoesn't even have to be paper shares. You can call up your broker and ask them to transfer X shares of ABC company into someone else's account. It is useful and essential to be able to transfer shares from one person to another without having to hit the open market. Like, imaging transferring 10% of a publicly traded company you own to the account of your family office.
- stale2002 5y agoSo if I could find someone who was willing to trade shares with me, for other shares, then I could just not have to pay taxes? Sounds like an awesome financial strategy! Sounds like someone could make a whole bunch of money doing this. But they aren't. Nobody is doing this. Even though, there would be a huge amount of money to make, from doing it.