Taxable Event
Any event or transaction that results in a tax consequence for the party who executes the event. Common examples of taxable events for investors include receiving interest and dividends, selling securities for a gain and exercising options. Investopedia Says:
Investors should focus on limiting their taxable events, or at least minimizing high tax rate events while maximizing low tax rate ones.
Holding on to profitable stocks for more than a year (to eliminate short-term capital gains) is one of the easiest ways to minimize the effects of taxable events. Related Terms:
Capital Gain
Cost Basis
Paper Profit (Paper Loss)
Realized Gain
Realized Loss |