Ask the Fool Cash Burn Rate If I have a big loss when I Qsell some stock, I can deduct it on my tax return, right? — D.B., Evergreen, Colorado Yup. No one likes money- Fool’s School tions are limited to $2,000 per year, My Dumbest Investment The Motley Fool Take but you can invest in just about any Alosing investments, but at stock, ETF or mutual fund. A ‘Smart Dumb’ least they can shrink your tax Investment While minors can’t open broker- on Sale bill. Here’s how it works: You age accounts on their own, they Investment Pharmacy giant first offset any capital gains from Accounts for Kids can do so with your help. You can Alliance (: WBA) is on sale. stock sales with your capital Investing shouldn’t only be done open an account in their name, and My dumbest investment was Even after its better-than-expected loss(es). Any remaining loss can by, or for, adults. Kids can benefit you can park dollars to invest in it, buying shares of back in fiscal fourth-quarter operating be deducted from your income — from investing, too — and getting too. There are custodial versions of 2002 — only to sell them in 2015. results, Walgreens stock was 32% up to $3,000 per year. Amounts them interested in it while they’re regular, taxable brokerage accounts, Yes, when I sold the shares, they below its 52-week high as of mid- exceeding that $3,000 can be car- young can pay off handsomely by and there are also custodial IRAs had grown to eight times what I’d November, and its dividend yield paid for them — but more ried over to the following year. starting them on the road to finan- that kids with earned income (not was recently over 4.3%. cial security. After all, kids allowance or gift money) can save recently, the shares are The issue for Walgreens is that the If you’re in, say, the 24% trading for about 10 times pharmacy chain operating model is bracket and you deduct $3,000 have decades in which to money in. Note that while IRAs invest, and small sums can are retirement savings accounts, my purchase price! Lesson built on low margins and high vol- from your income, that amount is grow powerfully over long young people are allowed to with- learned: When you have a winner, ume. That volume dried up big-time excluded from taxation. So you periods, helping pay for educational draw money for qualified college stay with it as long as you can. when the pandemic hit, crushing save 24% of $3,000, or $720. expenses and more. expenses without penalty. — H., online front-end sales and hurting Spend a little more time learning At a minimum, learn more about There are more details about The Fool Responds: This was a clinic revenue. On an adjusted basis, about tax rules and strategies, and very “smart dumb” investment, since the coronavirus reduced earnings 529 plans, which are designed to let each kind of plan, so read up on you got a 700% gain. How dumb you can probably save even more you, and others, contribute to a tax- them. Try to involve the kids in per share by $1.06 in fiscal 2020. it actually was depends on your However, Walgreens Boots Alliance money. Start at IRS.gov or advantaged account to be used for your life in your investing — and thinking when you sold the shares. someone’s educational expenses. theirs. Pick promising companies is undergoing a transformation that’s Fool.com/taxes. If you simply thought that a 700% already beginning to pay off. The com- *** (There are no annual contribution in which they’re interested, such gain was good enough, that’s fair, pany is on track to recognize $2 billion limits, but contributions exceeding as , , Apple or How much personal liability though you might have asked your- in annual cost savings by fiscal 2022, IRS per-person gift limits will be Nike. Discuss business stories in self how much more you thought insurance should I have? while sparing no expense boosting its Q taxed.) Each state has a plan, some the news. Kids can also learn more Amazon would grow. If you thought omnichannel presence. In the fiscal — T.W., Morgantown, West better than others, and you can use about investing with “The Motley that Amazon’s future was no longer fourth quarter, online sales at Boots.com Virginia any state’s plan. Learn more at Fool Investment Guide for Teens: promising, then selling was definitely and Walgreens.com rose by 155% and It depends on how much you SavingforCollege.com. 8 Steps to Having More Money the right thing to do. Amazon had 39%, respectively, from the prior-year Ahave to lose if you’re sued. Coverdell ESAs (Education Sav- Than Your Parents Ever Dreamed many unprofitable years, but that period. The company has also increased You want to prevent a lawsuit ings Accounts) are another option; Of” by David and Tom Gardner wasn’t due to a poor business model; the number of items that can be ordered they’re similar to 529 plans, but are with Selena Maranjian (Touch- from causing you a financial catas- the company was just plowing every online and picked up via drive-thru. offered by brokerages. Contribu- stone, $17). available dollar into furthering its trophe. Total the value of your Perhaps the most exciting develop- growth. Now it’s one of the world’s ment is Walgreens’ partnership with home, belongings and financial biggest companies, recently valued VillageMD to develop up to 700 on-site, assets. Add more for legal costs, near $1.6 trillion. full-service health care clinics that’ll pair though insurers sometimes cover Name That Company It’s generally a good idea to hang with Walgreens’ for an inte- those. Then check the liability I trace my roots back to on to your winners for decades, if grated medical experience. The strategy coverage on your home and possible, as long as their futures still is to reach out to patients with chronic auto policies. 1901, when Lynde Bradley seem rosy. They may not grow a lot conditions, making Walgreens a one- If your assets are considerable, invented the compression rheo- every year, but over time, a 700% stop shop for their basic medical needs. consider getting an “umbrella” policy stat: a way to control the speed gain can become a 1,500% gain, Long-term investors should (from another insurance company, if of electric motors. He teamed which can become a 3,000% gain, give Walgreens Boots Alliance a and so on. closer look. necessary). Umbrella policies gener- up with Stanton Allen in 1903, ally offer much more liability cover- forming me. World War I contracts age — typically $1 million or more LAST WEEK’S TRIVIA ANSWER — and charge much lower premiums and the spread of radio helped me I trace my roots back to 1927, when a talent agent created a radio broad- than homeowner’s and automobile grow in my early years. My products casting system for his clients to perform on. I soon merged with Columbia insurance policies do. were used in World War II in walkie- Phonograph and Records, and later entered television. (Westinghouse Insurance may be boring, but talkies, radar and fighter planes, and they Electric bought me in 1995.) My current name reflects a big media merger that closed in December 2019, reuniting two businesses that used to be it’s really important, protecting you served in the early UNIVAC computer and from potential financial losses. You under one roof. I’m part of the National Amusements . My can keep insurance costs down by in NASA’s space shuttles. Today, based in portfolio boasts Showtime Networks, Paramount Pictures, Nickelodeon, bundling policies with the same Milwaukee, my market value was recently MTV, Comedy Central, BET, Pluto TV and Simon & Schuster. I reach more insurer and shopping around for the near $28 billion. I’m a leader in industrial than 4.3 billion subscribers globally. Who am I? (Answer: ViacomCBS) best prices every year or two. automation and digital transformation, Want to Invest? Email us at [email protected], and we’ll employing about 23,000 people. Who am I? Want more information about stocks? send you some tips to start investing. Sorry, we can’t provide ­individual financial advice. Send us an email to [email protected]. Think you know the answer? We’ll announce it in next week’s edition.

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