Question

Courtney invested in RAD, Inc. stock 9 months ago. She is considering tax planning strategies at the end of the year and is pondering whether or not to sell her investment in the stock. A friend has advised Courtney that she should hold the stock for at least 3 or more months in order to have a long-term holding period. What considerations describes a valid reason for selling the stock now? Courtney is concerned that the value of the stock will decline in the near future.

Answer 1

What considerations describes a valid reason for selling the stock now? Courtney is concerned that the value of the stock will decline in the near future. TRUE

Step-by-step explanation:

Since Courtney invested in RAD, Inc., 9 months ago, any profit she makes will be taxed as normal income. So her friend's advice about holding the stock for 3 more months is a valid argument since any profits would be taxed as long term capital gains (which is taxed at a much lower rate).

The only reason why Courtney should sell the stocks now (or any time before the first year ends), is that she is afraid that the price of the stocks falls sharply in the near future.