Suppose you sell the bonds you purchased at $1,070 at $945 and purchase an equal amount of bonds with the proceeds. You are executing

Question

Quizplus · Accepted Answer

A tax swap involves selling securities at a loss to offset capital gains tax liabilities and then reinvesting in similar securities. Selling bonds at a loss ($1,070 to $945) and buying similar bonds with the proceeds fits this strategy.

Suppose You Sell the Bonds You Purchased at $1,070 at $945