Ben writes:
How does this trick work? Quite easily. Remember what I said about companies that pay dividends? When the company pays dividends you get dividends and a corresponding loss of stock value? So what happens if you buy a stock just before it pays dividends, then sell it right after? Right! You get money tax free. And you also get a corresponding capital gains loss. The loss can now be used to offset some other capital gain. Wash, rinse, and repeat as needed to offset any inconvenient capital gain that you might have taken...
Emphasis added.
As I understand things, e.g. from [link|http://www.ex-dividend.com/exexample.html|here] you only get the dividend if you're the owner of record before the "ex-dividend" date - on the order of 30 days before the dividend is paid. Since you don't get the dividend, the ex-dividend stock price is less. If you sell your stock during the ex-dividend period, you owe the new owner the dividend.
Since there's the risk of the stock value changing during the 30+ day ex-dividend period, it doesn't seem to be a way to "get money tax free".
It seems as if your arrangement depends on being able to rapidly turn-over the stock. How does the ex-dividend restrictions fit into your argument?
Thanks.
Cheers,
Scott.