Series 7: Chapter Four

Chapter Four

Taxation of Equity and Debt

A customer’s tax rate can be critical in evaluating a customer’s portfolio and making suitable recommendations for her. In this section, we will summarize pertinent tax rules and good practices.

When a customer sells or holds securities, there are tax consequences. The consequences that arise depend primarily on the kinds of securities that were purchased and the length of time they were held. When a customer sells a corporate security, the customer can realize either a gain if the security appreciated in value or a loss if the security depreciated in value. A loss may allow a customer to take a tax deduction. A tax ded