The following is a presentation of TFNN. The TFNN Bull Bear Trading Hour. Every trading day, live at 10 a.m. Eastern. Call now, toll free at<PHONE_NUMBER> or internationally at<PHONE_NUMBER>. The TFNN Bull Bear Trading Hour. Now, Tommy and Tommy O'Brien. Good Monday morning, everybody. I'm Tommy O'Brien. Join this morning by our man, Basil Chapman, feeling it for Tom. Basil, good Monday morning. Good morning to you. How are you? I'm doing fantastic, man. How about yourself? Very good. That is an absolutely spectacular weather-wise weekend. We deserve that. Nice. We're having a little bit of rain. We got a little bit of rain yesterday. Maybe not as much rain as they forecast, but this morning, a little rainy today, but that's all right. We'll take it. We need some of that moisture from all that heat that we get drying up, so that works as well occasionally. And it cools things off a little bit for us in Florida, too. I had a question for you. What are you looking for this very first full week of the July month? Yeah, there's a lot going on, right? I mean, headline-wise, the big one out there, Deutsche Bank, not really the big one, but getting talked about a lot for sure. Quite a restructuring. They're dealing with some woes. And just to pull up the chart as we talk about it, Deutsche really struggling. So we have the market to surmise it. Dow down about 108 right now. S&P's off about 13. NASDAQ off about 67. We'll jump over to Apple in a moment as they are getting hit in a downgrade this morning. But Deutsche down about 6.8% and putting that on a daily, it is a rough one down there in that restructuring. The market really not liking it. And Apple. You know, these tech stocks, Basil, it's interesting this NASDAQ. Apple down 2.6% putting this on a five-minute. Let it low. But quite an acceleration right off the opening bell with Apple getting hit and some of the suppliers as well getting hit on that downgrade that they may see some slowing woes in their iPhone sales. And so I wonder how that hits the market in terms of those technology stocks. And then of course we have Jerome Powell speaking to Congress this week as well, which should be interesting to see what he has to say. As the market, it seems like kind of factoring in the jobs number that we had on Friday still, digesting that and how that's going to play for the July 31st Fed. So I think if you can figure that out, you can figure out the market. And so it'll be interesting to see what Powell has to say this week as he goes to Congress. So let me just show you something. I showed this to my subscribers over the weekend to my opening call subscribers. I almost always show this on weekends. It's coming up right now. And this is what I call the triple yield weekly chart. It is essentially the 30 year. Let me just get it right here. There it is. So this, I'll make it bigger. So you see we're looking at the one chart and then all the others in the middle. Okay. And this is a weekly chart. And really what I've been saying for quite some time is, in fact, let me open this up and you will see something very interesting. Look at this. The white is the, this is a TYX, the 30 year T bond yield right there. It's a weekly chart. The brown is the TNX. That is the 10 year yield. That's the TNOTE yield. So it's a T bond yield, TNOTE yield, and the five year TNOTE yield, the F of VX, the cyan one. 30, 10, and five. Perfect. Right. And what's really interesting, I'll take this line right here, this horizontal purple line. And you can see we've been here many times before. Look how many times we've been here. Look, there's the clothes on. Well, it can go right to today. It's current. And we've been here.  Yeah, we're back near the election of 16, right? So I think that it's really important to keep in mind that it is the markets interpretation of what they think Powell will do, or let's say the Fed, not just Powell, but it's the Fed. And if you look at it, if you do the MRI of the patient, if you look at the X-ray of the patient, we've been here. So it's really the market is, when the market is a little vulnerable, which is what I was telling subscribers, to an opening call, I said, be careful. Last week, I said, we're getting real close to what I call in Chapman Wave methodology, peak D or F. This is the fourth or fifth highest peaks from a buy signal at the bottom. And this is where you expect that there could be some digestive phase. So none of this is a surprise. If you look at the chart formation, about two weeks ago, I said, I'm anticipating that bond yields are going to have a bit of a bounce. I think it's still a bounce. I still think that the big picture has us in what I had called 20 years or so or more. The Japanization of our bond yields, meaning they'll go down to almost zero. That's what we've been doing for the last number of years. And so nothing really has changed. It's just that the market was a little vulnerable right now. So you can talk about what will the Fed do? But if you look at it, the Fed, I mean, the Fed is kind of stuck. You're right here in the middle. Actually, they're not stuck. They don't have to do anything. That's what I meant. The market might just take care of the little bumps and grinds. What will happen is, if at some point you really get inflation, in other words, yields start to scream the 30-0, which is trading at 2.5 right now, starts to go up 3.455 that was higher in November of 2018, then, I think, and if you look at wheat and corn and soybeans, if they really start to push much higher and crude oil, then you're talking about the genies out the box and inflation will rear its ugly head. And when it does it, it does it really quickly. But we're not there right now. So I just think this is normal market conditions. Find something to be afraid of. And there it is. But if you're really looking at the overall market, we've had a really good run. You just need a bit of a time out. We've been long since June 3, the latest long position we've had in the Dow. Took a little profit on Friday. I said at the opening, I said, just take something off. We're getting close to a peak D. Hey, I don't see anything too different right now. When you talk about Apple, well, if you look at the whole XLK, that is the S&P Tech Spider Fund, it has gone to that leg D. Let me just put that in. I forgot to do that over the weekend. Put it in C. And D said it's ready for a bit of a breather. But look at the spectacular move. It's gone to a new all-time high. This is now leg C in the weekly. I mean, we're talking about in the 57 area back in December and now trading 22 points higher. You would expect that there's some kind of a breather. So I'm just trying to put it into the perspective of what I'm looking at and saying, nothing is too unusual right now. We've had a fabulous move up. Get a bit of a digestive phase. And it's interesting. We get CPI data, I believe, on Thursday at 8.30 in the morning as that inflation. So I'm going to get Powell. Is it Tuesday and Wednesday? At least it's Wednesday. I believe he's speaking to the Senate on one day. This is a biannual that he goes before Congress and maybe the House one day. So you get that. You get the CPI data on Thursday. And I assume that all that's going to play into what he's going to do. But I agree. I mean, the run's been spectacular. We're almost, we're not almost. We're basically at highs. At highs? Yeah, all-time highs. Yeah, not even basically. We're at all-time highs across the board. And it's pretty remarkable. I mean, Apple, before they pulled back, they think they were up at almost a $950 billion company battle right up. I think that their price tag for a trillion, excuse me, a trillion, yeah, $950 billion is somewhere around 207. So they just pulled back. I think they were at about 203 to start trading. And if you look at the chart, 233 was the high back in 2018. Yep. And then it drops very sharply. It goes to 170. But it rallies back to 205 just Friday. And now it's showing at 199. If you look at the chart, it says Apple's a mature company. It isn't the kind of growth stock that it used to be, but it's really a very solid, good company. I mean, I completely agree. I was just going to say it's amazing for how stable of a company they are, that run that they had from the high of 230, the low of Christmas Eve, to the highs that we just made on Friday. Folks, Basil and I will be right back. Come on back. The Taz Profile Scanner is the most revolutionary piece of trading software that you will ever try. Wouldn't you like to approach the markets with confidence? 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TFNN.com, educating investors. Call now toll free at 1-877-927-6648 internationally at<PHONE_NUMBER>. Back folks, I'm Tommy O'Brien joined by Basil Chapman this morning. We got the Dow off about 90 points. S&P is negative by 10 right now. NASDAQ negative by 60 points. Basil, just to finish up on Apple, because it is interesting, you know, I just put some Fibonacci numbers just even on that recent run going from about $170 up to 205. You know, if you even look at a 38% retracement, you're talking about $192, more than $7 from where we're trading at right now. And that's just from June, let alone how crazy this chart looks if you pull it back to that low of January 3rd at $142. So, pretty reasonable. A round number, $142. You like those round numbers. I love those round numbers. The fundamental aspect of Apple is always interesting. I'm a huge Apple fan myself. I have an 8 Plus in terms of an iPhone. Had it for about a year and a half. My home button, ironically enough, is having some problems right now, so I got to get it fixed. But you can see how the cycle of needing these phones is so much less in terms of how often you need them. The technology is just not really differentiating itself as they used to in those two year cycles. So it comes down to whether they can maybe transfer that revenue model to recurring revenue, cloud, and et cetera. And that downgrade this morning was saying, that might not be as easy as you think and those iPhone sales are going to continue to struggle. So we'll see how that hits that point. It's interesting you say that because when I saw that sign flash by when I was over at the fitness center this morning, I thought to myself, that's interesting because there must be a lot of people like myself who just do basic functions on their cell phone all the time, but it's the same thing over and over and over. I think it's terribly complicated, but it's just you need it, but you only need it for certain things. Right. Email is great to have, right? I mean, the basics, yeah. Internet when you need to hit it up. The few apps that you might like, maybe use something for your fitness, right? Maybe you have a step tracker, a fitness tracker. Guess what? I mean, a new phone isn't going to make that fitness tracker much better. They're making advances and they might have, you know, the new watches, the new eye watches have heart rate, right? They can talk. So there's ways, but I agree that on the most... That is more part of the legacy. That's more part of the... How can we put it? It is the the function of getting some residual every month so that there's some income coming in. And that's going to be really important. So I like to look at Apple now more. And I've been saying this maybe for about two years. I said, look at Apple, not so much as a growth company in the old fashioned sense when Jobs was around, that there was just a new innovation coming in that was so stupendous that people would line up for blocks and blocks to get. It isn't like that anymore, but what they will probably do is try to get that income stream that comes in month by month and then the healthcare, I think that's going to be huge for Apple. But that's what I mean by... I talk about Apple as if it's like the General Motors of the 1920s. It'll be around probably for a long time. It is a well-structured sophisticated company and they need to innovate in ways of getting the pie bigger every month. Like Apple TV, right? Exactly. Opening up content for the people that they already have and monetizing that. It needs to kick in and it needs to be a desired product. It's tough, man. I agree with everything you're saying, but it's so tough. You saw the reaction to when they announced that Apple TV, right? They had stars. They had Steven Spielberg saying he's going to direct movies for them and that was not enough because the amount of money that you have to spend to compete with the likes of Netflix or was it $6, $7 a month Disney is going to be taking in for all of their items that they offer. I agree with the health aspect. I do not own an iWatch. I've thought about getting one, mostly for the fact of that kind of health tracking type deal. They could have a lot of potential there if they were able to get their products monitoring people in that health aspect and then somehow capitalize on that. But as a fan, I just don't see a ton of phones on the regular from them anymore. I love my A+. It's great. It's perfect. I really don't need another one. I just need it to keep working properly. Maybe it has some battery problems, et cetera, but I don't need to go out and spend $800 or $1,000 every two years anymore for that upgraded technology. That's what you see in the chart. The chart is saying that a fabulous move, a little too much in too short a period of time, probably I wouldn't be surprised if it just stays in this for a little while before before they trigger some kind of real affection for a new Apple product. That's really important. The PE reflects that. The PE is sitting at about 16.7 so nothing too outlandish for a company that still likes to talk about that they don't talk about it but that maybe they're going to get into the car business, right? I don't know. Maybe so there's some things that could have some growth in there that probably should be factored in down the line. That's kind of what you see. Look at Netflix. If I go to the chart of Netflix, did I hit the wrong bar? Netflix hasn't made a new all-time high 423 was the high back in June of last year. It takes a dive down to I think it was at 237. Let me just double check. No, no, it was higher. 231. So it goes down to 231. Let's face it, 423 to 231 for one of your leading fang stocks. That's a big hit. For a company everybody loves, right? You don't really hear a lot of negative talk about it. So it's come back very strongly and it's gone to the most recent high. Peaked in the weekly chart of 385.99 just missed by a penny a round number and it goes to the 330s. And now it's back to 377. It's acting very well but it isn't a leader. In other words, the fang stocks themselves Amazon is probably the one that's the closest to its all-time high and there's a good reason for that because they're still innovating. The patents actually are very much the same except that Amazon's in a V-shaped patent is a stronger patent than the others. But they've been in a, what is it? You know, this is July. What an eight, nine months consolidation. I think that it's telling us that there's been new leadership in this last rally and that there's a chance that the fang stocks will be back but I think it's a little later in the year than they really kick in. But at this point I think they're digesting massive gains and it's taken quite a while. Yeah, Amazon sitting, I just pulled it up which doesn't actually seem that bad for a company like Amazon which so much growth down the line. I mean they're just building out it feels like their own delivery system.  I'm wondering about that because when you get into it they've already put here in Newton, Massachusetts in the Garden City they've put in restrictions for noise. And those drones can be really annoying. Sure, they're little flies flying around everywhere, right? So I don't think it's going to be quite as soon and quite as easy as in some places maybe it'll work but I think in the rural areas maybe in the city I can't see it at all. I think what you'll see ahead of that is driverless and I don't even want to call them vehicles those little pods that they've shown I'd say that's the first step but I agree when you start talking about it I joke with friends sometimes my phone can't even work for an autocomplete for a word that's very basic and somehow we're going to have self-driving cars in a few years. We've got a few years. Basil, I'll be right back folks come on back with us. Pike folks, Tom O'Brien here. If you'd like to get my daily newsletter of market insights then now is a great time to sign up for a 30-day free trial. Every morning by 9.30 I send out a market commentary on a variety of markets currencies and commodities to keep investors up to date on the day's trading action. Included in market insights are specific buy and sell recommendations for stocks, ETFs and even options which stops and price targets included for every trade in my newsletter. 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This segment is brought to you by Think or Swim. For more information, just click the Think or Swim banner on the front page of TFNN.com. Hey, I'm Basel Chapman, and I'll have 117 S&Ps off about 15, NASDAQ off about 68 points right now, hanging out. Basel, can we jump over to the gold contract? We got some action in gold as it continues this morning. We've made it up to about 1410. We're trading back right now. And let me just put, I have this on a daily. And again, just kind of going to the trend where quite a run on all markets since like that beginning of June, whether it's late May and gold, but kind of took off in the beginning of June as well. And when you start looking, the run has just been so dramatic. We went from about 1270 in gold at that time, all the way up to above 1440. You kind of have a double top, which is a little bit worrisome here if you're a bull, but that hasn't even really reached back. I mean, 1377 would be a 38% retracement. You're kind of sitting at about 23%, and that is just from that run of 1270. And what are you looking at, Basel? I'm interested with the peaks with just how volatile really gold has been trading recently on the up and the down. So there are a couple of things that's going on as far as I'm concerned with the gold. And the buying, one never really knows exactly what it is, but it seems to me that it fits very nicely. If you think of it as a fear trade, in other words, the whole geopolitical scene kind of exacerbates, gets kind of worse than it kind of cools down. But I, because silver should have been, if the two were going together as a metals play, silver wouldn't be as weak as it is, and really is weak, if you look at that monthly. So my suspicion is, it's so interesting. I decided about, maybe it's four months, maybe it's about four months ago, it might be more time flies when you're having fun so much. Maybe it was four months ago. I said, no, it was actually a little bit more. And I remember thinking, wait a minute, I'm getting such unusual action with the dollar being strong and gold sometimes being strong. I have the theory that you can go back and look at historically what happens. Every year, maybe two to three weeks, a few times a year, gold and the dollar, instead of moving in counterpoint, meaning they're going in opposite directions, not the same percentage, but just direction-wise, they go together. And it's just an aberration. It's the way cycles work. It's nothing, I don't think it's more than that. But my belief has been over the past, I really think maybe it's about six months, that gold is one thing. The dollar represents something else and yields represent something else. They come together every once because cycles can overlap. But if you think of it this way, the dollar, to my mind, is representing the US economy and it is the currency of strength because this is the economy of strength. So I've made it as simple as possible. One of the reasons why, for subscribers, we've been long since April of 2018, back in 90, and we remain long because even last week was a bit of a surprise for the dollar. Even last week, the dollar ran right up to a channel. Now, you asked about gold, but I'm trying to put them into perspective. It ran right up to channel resistance at 97.44. This is the dollar index, not the futures, but they travel in the same direction. So it's in leg C and it should make a leg D and that should break above the resistance line. And if I squeeze the one, first of all, if you look at the monthly on the right, so it's the daily chart on the left, the middle is the weekly, I'll just squeeze it a little bit to make it so you can see it more in context. You can see that cup formation, I always like to look at cup formations. He has a second one. So last week's strength was a very pleasant surprise to me and I really thought that the sharpness could continue a little bit, especially when gold had a couple of good pops. Now, this is going to be interesting. If you look at the monthly chart of the dollar, it's held the black line, the 14-period moving average, it's held the green line, the 9-period moving average, the MACD is good, the stochastic is at 86% and that's very good. So now, the reason why I'm saying to you, I'm trying to separate and give my reasoning. So this is now an economic, geopolitical, American icon, and of course yesterday we won the soccer, so it kind of fits in nicely with that. So this says to me, the dollar is still holding very well. I would prefer if a source to make MACD goes into the 9850, 99 area in July because that will clear it up for me. It'll say dollar really is acting well. Now let's go to gold. Gold, and for many people, the gold bulls, the actual move up four weeks ago, that big strong signal, the right there that broke out of the resistance, the resistance in the continuous contract of 1361 back in the week of the 22nd of February, we went right through that. Now in the traveling methodology, if this is what I call a cup and ladle breakout in gold and the MACD in the weekly chart is so strong as stochastic is at 81%, not great, but it's good. This says it should go to a leg C and a leg D. That takes it way into the 1450s, 1460s actually. So let's go one step at a time. This pattern that I put a rectangle in, oh, quite a, quite a, as we're making that peak F, I said I think we're going to be trading in this range because it's a pattern that's very familiar. It's like a, in classical terms of technical analysis, it's like a flagpole and yes, the flag, it's a rectangle flag. Now let me show you something just pattern-wise. Look at this. If I take you to the bonds, this is the TLT. Look at this pattern. It's the same thing. That was a peak D. Look how long we've lasted in this rectangle formation. So my point here is that rectangle formations can last a lot longer than your patients. They can go sideways. If you don't get, especially at a peak F in the Chapman wave, if you don't get an immediate breakdown under these key moving averages with the MACD turning down sharply negative, with stochastic probably going out to 66 billion, should be at 40 something. It says that he's buying. It doesn't mean say buying enough to break out, but it says buying enough to hold. So I'm looking at this and I think if patterns repeat, this sideways consolidation with another pup to the upside just about 14, 42, 90, I'm expecting something like that. And it's saying that gold for whatever reason, and my reasoning actually is that it's part of this whole geopolitical fear process. Gold is historically a currency of fear. And that's part of it. But this time is a little different in that if you look at the, if we go to something like the GLD, which is the gold index which follows, it maps out the same as gold because it trades at a tenth of the price. That's a little different to if you go to the XAU. And the XAU, look at this. The XAU, oh, I didn't know, I thought I'd notate this. I guess I lost the notation. Has the same move, but this time you've got gold stocks and the gold contract moving in unison. And that's the reason why I think we've got a high level consolidation. This is good action, but I do think that the dollar at some point a little later this summer will break to the upside. And that's when I think gold has a deeper correction. But as a move to explain it, technically the way I've done it now, that's the only way I can really explain it and say this time is a little different the reason why it's holding is other times either the gold, like the HUI, the gold stocks themselves were moving up higher. Oh, I meant to go to the GDX. I know all those symbols and all of a sudden I lost the track. It's a GDX. Look, the GDX did break out in unison. That's a good sign. Yeah, I mean, what I always look at that too is just as interest rates are plummeting, man. You know, you're talking about a 10% two-year. We'll pull it up. I mean, I just took a look. If you just take your $1,400 as opposed to an ounce of gold, what do you have in 10 years at that 2% versus maybe you hold that gold? We'll be right back. If you're in the CD market and looking for a secure investment, the Tiger First Mortgage Program may work for you. 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I'm sure you've noticed that the 10-year is trading at right now for a yield at least, and you're looking at about $1,700. So the decision you make is that what's the more profitable scenario in the long run of taking that $1,400 and investing it in a 10-year or taking that $1,400 and putting it in gold, and there's many other options. But people, some of those you're making that comparison, they're all intertwined. And I like that probability when you get down at 2%, and you have gold of 1,400. You're sitting back on a long-term chart of gold. You know, that high back there, it's amazing. It's all the way back in 2011 now. At 1923, you're sitting at 1399, 1,400 on the dot as we speak. And 10 years in the future, do I think gold could be sitting at 1,700? Yeah, I think there's a pretty realistic situation. The gold is 1,700 or much higher. So just to emphasize that what you're really saying is that gold has no income. So it has to be the capital gain. Oh, right. Yes. And you're trading off potential capital, we don't know, since potential capital gain. For sure. To a guaranteed income. And I believe, now I can just do things anecdotally when it comes to something like people that I know that I play tennis with. So let's just say there are a lot of people at the courts who play that I play with in my range. So let's call it between the ages of the 56s, maybe even 70s. Money in the market, I'm sure, right? Whether they're retired, semi-retired. And a lot of these people have been in the market almost all their lives, all their adult lives. They've had something in the market. There are still a lot that since the shakeup of 2008, 2009, that either tiptoed back in or the ones who were lucky enough not to be, didn't know what to do just held and say, you know, we think maybe in the market we're coming back, but boy, we're terrified. They've been fortunate because the market not only has come back, but it's come back even stronger. But the ones who got out, and there are a lot of people that I've spoken to over the years who didn't get out, at least a chunk of money of which they've not put back a chunk of money. They've put back much less. Now, we're talking about something very different.  You said in 10 years it can get from the 14th to the 17th or you could put it in gold. Do you think that they're going to take a risk and put it into gold? I don't think so. Maybe not at 2%, but I think if the rates continue to get cut, that, you know, 1.5%, 1.75%, that's I think what may have picked up on that run from the beginning of June. So now it brings me exactly to the point that I wanted to make out. I'm pleased you said that. Because let me just go to the TLT. I always have to remember what I typed in here. What was it called? It's called, I've got it right here on the left. It says, oh, TINA. An expression I heard a couple of months ago. I thought, what is TINA? And then someone said, oh, yeah, TINA. And the low rates are forcing TINA. I said, what's TINA? There is no alternative. So now we get to a picture that says, I think there are a lot, and I don't mean a lot, meaning just amongst people I know, but from what I've read, from what I listened to, from the ads that I hear of so many investments. There are so many dinners for free to come to an investment seminar. There's a growth of that. So I'm looking at this and thinking to myself, okay, I've seen this scenario before. When does it happen? It happens as the market's starting to improve and you've had a lot of volatility.  So now the reality is, I think a lot of people have been forced to go back into the market because there really is no alternative. But at the same time, they've got like one foot in and one foot out the door. They're really not that sure. So when you bring up maybe something like a 10-year with a guaranteed very small, but at least it's a dividend that you're getting or the risk of gold, my thinking here is that I would not be surprised if we've got a split. This could be where majority of older investors for the first time that they can ever recall have a foot in many doors. And that would be smart in my book. That's kind of the approach I would take, which is probably why I ran through that example in saying, yeah, you could have both, right? Because that is giving you one affixed and the alternative of capital appreciation. Yeah, because do I see gold at $1,000 in 10 years? No, I don't. I don't know what would happen for the amount of people in the world to grow over that time, right? The economy to grow to inflation to come up, yeah, right? And so as opposed to, and just like you're saying, you see the market that is so high right now. Could you get a pullback over three, four years? Yes, you better acknowledge that that's possible. Do I think it's going to happen? No, not for three or four years, but you better pull up a long-term chart of the S&P if you don't think at the highs that we're at and the run we just had that we could see that and then you could take a year or two to get back to that level or something. So diversifying yourself away from the market and still having a foot in all those doors would probably be pretty profitable. That would be my take on things. I mean, it really would with the run that we've had. And especially I've brought it up before, we're coming into an election. That's going to be rough no matter who you are, what you believe. And so the market might be a little bit worried at the highs that we're at in terms of how that will affect things over the next 12 to 16 months until we figure out who wins in 2020. On top of everything else we have going on with the Fed and so forth. So here's the other thing. Have a look at this chart. This is the S&P. Where was it? When did Trump come in? It was November the 9th, 2000 and the election was in 16. So right there. That's the way of the right side, yeah. There it is. So right there, okay. And that yellow oval that was chop, chop, chop for many months. Sure. So you go from 1810, that's 18, $1,810. I didn't want to talk about the year 1810 when I think just before Chopin was born. This is 18, Napoleon was invading different countries. 1810 is the price of February of 2016 was the low. So that, so wait a minute, the election, so the election was in November. No, no, it must have been, wait a minute. Why is this? Where are you looking? November of 16th. So it's right after, there's a red bar in there. I can even pull it if you like. Yeah, that's this little red bar. Yes. So what you're looking at is that the low of the SMP was in February at 1810. Sure, yes. But then you get the elections, and ever since then, so let's talk about the elections, you've gone from 2192 to 2974. Isn't that interesting? And it's especially interesting, I think, after the run that it had preceding that, right? From like the lows of 2010. The Obama run, absolutely. Look at this spectacular run. There's that pause you circled, there's that pause and a huge upward trend. We'll be right back to finish this conversation, folks. I'm certain you are, or strive to be, one of the best of the best at everything you do in life. It's the most common trait that we tigers and tigers share. If you're looking to become the best of the best when it comes to managing your money, let me teach you to do what most wealth managers tell you can't be done, which is how to time the markets. I'm Steve Rhodes, author of Mastering Probability, and for the last 12 months, Timer Digest has been tracking my newsletter signals to earn me the ranking as their number one market timer in the nation for the S&P 500 for the last 12, 6, and 3 months. Timer Digest also ranks me as the number one market timer for gold as well. The fact is, markets can be timed, and I'll teach you the exact set of tools that I use that has transformed me into one of the best at what I do. Sign up for Mastering Probability today by clicking on the newsletter tab on the homepage of TFNN.com and getting immediate access to workshops where I take you step by step to use an extraordinary set of tools as well as provide great market calls too. Sign up today. It's amazing to think that Tom O'Brien started his weekly gold report 17 years ago with the first issue published April 7th, 2002 when gold was trading at under $300 per ounce. Gold peaked at more than $1,900 in 2011 and after spending many years consolidating at lower prices, gold may be poised for its next big run. Tom O'Brien publishes his weekly gold report every Monday morning for subscribers consisting of coverage of the XAU, HUI, GDX, the Dollar, Bonds, South African Rand as well as 25 different mining equities with specific buy-sell recommendations. As of April 1st of this year, the gold report currently has 8 active positions with an average unrealized profit of almost 8% for each open trade. New subscribers get a 30-day money-back guarantee so you have nothing to risk for all the details of the start-year gold report subscription today. Visit the front page of TFNN.com.  Sign up today. Since 1984, Basil Chapman has been using the Chapman Wave methodology to advise traders of his expert market opinion. While originally hand-drawing charts from the late 1970s into the 1980s, Basil noticed that prices under most circumstances virtually always had a certain number of legs to the upside before declining sharply. Later, Basil found that computer software which included the standard market technical indicators enhanced the degree of accuracy in calling price turns as well as market trend calls. Thus was born the Chapman Wave sequence. Using the Chapman Wave methodology along with other indicators, Basil Chapman advises his subscribers of his expert market opinion each market day with his opening call newsletter. Right now, you can get a two-week free trial to the opening call Basil's daily trading newsletter by visiting the front page of TFNN.com. Cancel at any time during that trial and pay absolutely nothing. Get your two-week free trial to Basil's newsletter of the opening call today by visiting TFNN.com. This segment is brought to you by Think or Swim. For more information, just click the Think or Swim banner on the front page of TFNN.com. 140 S&Ps, negative by 17 Nasdaq, negative by 71. And Basil, just finishing that up, I always like checking out the Fibonacci retracements and just kind of where they fall. And man, if you ever go from the low of 2009 up to the run that we had of about 3,000. So you're going from about 665 in the S&Ps to basically 3,000, a 38% retracement, which on a lot of things could be a healthy retracement is 2,100. So you're talking about 800 S&P points, 860 S&P points. 100, they're December long. Oh, yes, for sure, right, exactly, which is remarkable. And then, you know, if you just go off the lows that we had in like 2015, so a much more reasonable, smaller time frame, which I don't think would be too right because you really never got a pause. You got about a pause for a year, maybe maybe two, that consolidation. But you never really had a pullback. You just had kind of had a consolidation. Still a 38% retracement in the 2,500, 2,531, 2,539. So you're talking about a solid 400, practically S&P points that you could pull back. Very good points. And the other thing I just wanted to say is look, in the Obama administration, look what you did. So 666 to 2,134 is what you were talking about. But I always like to say you have to, you have to, in the stock market, you've got to put your politics aside. You've just got to look at the market and say, what is happening? That's why I said, look at the chart of the yields. We've been here before, put the whole story aside, and just say, we've been here before and we've recovered, we've done it very nicely. So the only other thing I want to say is that this is still only, and not the Dow, but in the S&P this is still only leg A to the upside if it's an A. Leg A. Watch out. And since December low, yeah. Watch out. So you're ready for some kind of a pullback. Perfect. Well, Basil, you got a lot to talk about in your new Tiger Technicians Hour program, man. We just, that was the beginning of the fun. I appreciate you feeling it as always, Basil.  Have a great Monday. Thank you, Tommy. Thank you, Basil.


Hello and welcome to the session. This is Professor Farhad. In this session we're going to look at an introduction to property transactions, specifically we're going to be covering gains and losses. And to be more specific, we're going to be covering capital gains and capital losses. This concept is basic, but it's very important that we're going to be building on later on throughout the course. This concept is important in an individual income tax course as well as corporate income tax course. And obviously the topic is heavily covered on the CPA exam regulation and if you are taking your enrolled agent exam. Now, before I start, I would like to remind you that I would like to connect with you, my viewers. I'm very active on LinkedIn, not that I only post lectures. I also post other news, CPA as well as accounting news. So please connect with me on LinkedIn. If you are a Facebook user, like my Facebook page. And you could also connect with me on my personal Facebook page. Obviously I want you to connect with me on YouTube by subscribing to my YouTube. So this way you'll get updates about my new recordings and you don't want to miss anything. Let's start to talk about gains and losses from property transaction now. The first thing is why do we need to learn about those gains and losses? Well, simple gain and losses will be included in your gross income. Well, therefore, we have to learn about them. So when we're computing gross income, we have to know if you had a gain or if you had a loss. And as a result, that amount will be included in your income. Therefore, we need to know if you have a gain or if you have a loss. Now, the next thing we're going to we're going to talk about is something called realized versus recognized gain and loss. So it's very important that students differentiate between what realized is versus recognized. So we're going to spend the next 5 to 10 minutes explaining maybe a little bit further, explaining this concept. Student, they always, always, always fail to appreciate the difference between the two. So first, I'm going to tell you what realized is. I'm going to give you the formula and we're going to break this formula later on a little bit further. So here's what realized is to compute your realized gain or loss, you will take something called amount realized. Sometimes you can call it consideration received. Now, what do we mean by this? I'm going to explain this later. I'm going to explain what later showed next. So what is amount realized? Basically, I'm going to keep it simple. Let's assume you sold a vehicle, a car, and the amount realized somebody paid you $5,000 in cash. Keep it simple. Okay? This is what you realized. Then what you do, you deduct your adjusted basis. And I'm going to keep this very simple as well. And let's assume you paid for this car $4,000. And that's your basis. Now, I'm going to talk about both of these items in details in a moment, but I'm keeping this simple. So you sold it for $5,000, your adjusted basis, and your adjusted basis here. I'm going to make it simple. It's what you paid for that car. You paid $4,000. So you bought a car for $4,000. You sold it for $5,000. Therefore, you have a gain of $1,000. We call this your realized gain. This is what actually happened. You received $5,000 in cash for selling your car that has a basis of $4,000. Therefore, you have a realized gain of $1,000. And this is what realized is. It's the amount realized minus the adjusted basis. Now, what goes in the amount realized and what goes on the adjusted basis? I'm much, much more than I just told you, but this is just to kind of get you going for now. Now, let's talk about recognize. Recognize. Now, difference. Notice the difference. Realize versus recognize. Now, we know you realized $1,000. The next thing you ask yourself, it is what is the amount I need to recognize? So what is recognize? Well, guess what? It's the amount that you have to include. You must include by law. Include where? Include on your taxes. Include on your taxes by law. What amount? Now, for the sake of this example, you're going to have to include the full $1,000. So you must include in your income. You must include in your income because you sold this car. You must include. You don't have an option. You must include in your taxes, which is it happens to be $1,000. Sometimes if you have a loss, you can. You are allowed to deduct the losses. And remember in taxes, we always prepare losses, right? And if we have losses, we want to deduct them, okay? Now, here we have a gain. And we'll talk about this gain later on as well as when can you and when you don't have to include the gain, so on and so forth. But the point is what was realized may not be what's recognized. What's recognized is what you have to actually record on your tax return, which is different than what actually happened. We have special rules that you might be able to defer some of that gain. You may or may not be able to deduct the losses. We're going to learn about those. But the concept before you start is sometime on the CPA exam, they might ask you, what is the realized gain or loss? Or sometime they ask you, what is the recognized gain or loss? So you need to understand the difference. Before you know the recognize, you have to compute the realized. First you compute the realized. Then from the realized, you would say, okay, this is recognized or not recognized. Okay, now let's talk much, much more about the realized concept that amount realized. Okay, remember when we said amount realized, we said consideration received. And in the prior example, I told you the consideration received a sketch. So I received cash. Now that's not the only thing you would receive if you sold something. If you sold something, most of the time you would receive cash. That other individual may provide you service and you can put a number on that service, basically a fair market value. That other individual or the other party might give you property. You would use the fair market value of the property received or they may give you some other asset. So all of these are considered, consideration received or amount realized. So the other party may pay you cash. They may provide you a service. They might give you a property or some other asset. Okay, then if the other party gave you a mortgage, gave you a liability. If you assumed a liability on their behalf, then you have to deduct this from the amount realized. Simply put, if I gave you a house that's worth $150,000 and that house has a liability of $150,000, I didn't give you anything. Okay, a matter of fact, that's what was happening during the financial crisis of 2007, 2008. People were trying to sell their house exactly for their mortgage. So as long as you assumed their mortgage, okay, if you tell them, look, I'm willing to take over your mortgage, they would say, okay, go ahead and you can have my house. Okay, just make my payment, assume my mortgage. So that's why we deduct. Notice there is minus before the mortgage. So notice we have a minus sign before the mortgage. Just want to highlight it here. Let's see right here. We have a minus sign. And also, if you have to pay someone like a brokerage fee, you deduct the brokerage fee from the amount realized because you did not realize it. It was taken away as an expense to sell, cost to sell, cost to sell something. Okay, now, adjusted basis. Remember we said we'll take the amount realized, then we deduct from it the adjusted basis. Now how do we compute the adjusted basis? That's another important computation that we have to be familiar with.  Okay, so cost is what you paid for. Usually that's the largest. Generally speaking, that's the largest amount. What you paid for something, usually, generally speaking, is what you paid for it. Then sometimes what happened, you might add something to that asset. For example, a house. What happened? You bought a house, but you put a pool in that house. Or you put a big fence around the house. So that's a capital addition. Now remember, your cost is basically a recovery of the capital doctrine. Okay, allowed to recover your investment tax free. So when you sell something, you don't pay taxes on your cost. Why? Because you are recovering what you paid for something. Remember that.  If you withdraw $1,000, you don't get taxed anything. Okay. Now, capital addition. What is capital addition? Capital addition are expenditure that add value to the property. Again, we said, let's assume you put a pool in that house. Okay, so that's a capital addition. Or you did something that's going to extend the life of the property. And the concept of capital addition, very similar to GAAP. If it extended the life or it makes it better or more productive, then it's a capital addition. Okay, so what you do is you take your cost of the asset. Let's assume you bought a house, a property for $300,000. You put a new pool for $25,000. Now, your basis in that property is $325,000. Then you deduct any cost recovery. Now, what are we talking about cost recovery here? Really, what we're talking about is depreciation expense. If you happen to be depreciating this asset. Now, you don't have to know that much for now about depreciation expense. Hopefully, you know what depreciation expense. But don't worry, we're going to talk about this much, much more in details when we get to chapter 13 and 14. But basically, depreciation expense, you have to recover your depreciation expense. Therefore, you have to reduce your adjusted basis. So the depreciation expense in the year that you take the depreciation, it's good. In the year that you take the depreciation, you're going to be very happy. Why? Because depreciation expense lowered your taxable income. You're going to be very happy. Then in the year you sell this asset, depreciation expense lowered your basis. Because it lowered your basis, you're going to have more gains. Because you're going to have more gains, you're going to have more in taxes. In case in point, I'll tell you about my uncle. My uncle used to own a bar in a college town. And he owned this bar for almost 15 to 20 years. I don't remember, but more than 15 years. So throughout the first 15 years, my uncle paid a little bit of taxes in a sense that he will pay a few thousands dollars a year. He was very happy. Why? Because he used to have a large depreciation expense. So every year, he would have a large depreciation expense. And as a result, the depreciation expense is deductible. So every year, the depreciation expense will wipe most of his tax bill. And he was happy. And my uncle doesn't really understand taxes. He just knows his accountant would tell him, look, this is your tax bill. Pay it. And he would pay it. Then a couple of years ago, his son had a kid and he decided to retire. He had enough. He's old. He's old now, him and his wife. So they decided to kind of, and they truly deserved it. They decided to retire. So they decided to sell the business, the bar. And within that bar, there was also two property. And when they sold them, when they decided to sell the bar, they had the large tax bill. So their tax bill was very huge. And what happened is this, when they decided to sell the business, all those depreciation that they took for the past 15 years, they came back and they hunt them. So what happened? Their basis went down substantially. Now they sold it at, you know, I'm just going to give a number, a million dollar, but their, but their basis is very low because whatever they invested in that property has already been depreciated. So what happened? The depreciation lowered the basis. Notice here, cost recovery at lower the basis. Therefore, my uncle called me and he was like kind of nervous. Like, why am I paying all, suddenly paying all these taxes? Uncle, look, you haven't been paying really taxes for the past 15 years because you were taking those depreciation. And he's a very tax business savvy individual. He said, yes, I now I understand how it works. He basically told me basically the government was deferring Durbil. I said, yes, that's exactly what's happening. And now it's not only deferring Durbil.  Now you're going to have a large income and you're going to pay more on that, on that money. So you can have understood the, the concept and hopefully you understand it that when you take the depreciation, you're going to be very happy because it's going to give you a tax deduction now. But when you sell the asset that's being depreciated, you have to recover that depreciation, which in turn will lower your basis, which in turn will give you a higher gain, which in turn will give you a higher tax. Again, we'll revisit this topic much, much more in details, but this is basically an introduction. Okay. Now we need to talk about sale of personal use asset. Personal use is something that you use for your own thing, like a computer, a car, a phone, a cell phone, a textbook. Your textbook as well is a personal item. So if you are following me in the textbook, that's a personal use asset. Here's what happened. If you recognize it, if you incur, if you realized again on personal use asset, you'll have to recognize it. Recognize it means what? You're going to have to pay taxes. You include it in your taxes. However, if you incur a loss, you don't recognize. Now the question is, hold on a second, why not? It's not fair. Why do I recognize a gain and I cannot recognize a loss? Well, think about it for a moment. If you could recognize a loss, no one will really pay taxes. What I would do every year, I will buy my car, I will sell my old car, I will sell old furniture, sold my computer, sold my cell phone, and guess what? Sell them at losses because I use them. Obviously I'm going to sell them at losses because I'm not going to get for them as much as I paid. Then I will have a loss and I will never pay any taxes. So think about it intuitively. If you have a personal use asset, you cannot deduct the loss. But if you have a gain, you have to pay taxes on the gain. So the gain is recognizable. The loss is not recognizable for personal use. Now the next thing we have to talk about is something called capital gains and capital losses. So simply put, we have to differentiate between capital gains and capital losses from something called ordinary gain and ordinary losses. Now why do we have to differentiate between those two? Well, simple. On a personal level, they result in different tax treatment. So if you treat something as a capital gain versus ordinary gain, it makes a difference to your taxes. So that's why first you have to know, what is a capital asset? Is it a capital gain or is it an ordinary gain? So what is a capital gain or a capital loss? It results from the sale or exchange of capital asset. Result from the sale or exchange of capital asset. Now we did not answer the question. What is capital asset? Basically, capital asset is defined as what it is not. So simply put, capital asset is any asset that is not. So it's basically the definition of it. It's like, it's not that. So what is a capital asset? It's defined as any other, any property other than, other than what? Other than inventory, other than account receivable. And notice inventory and account receivable. They're kind of your use in your ordinary business, right? Depreciable property or real property used in a business. Okay. Those are not capital assets or anything other than those. So what's left? Most personal use asset owned by individual are capital asset. Most used asset are capital asset. Okay. And losses on these assets are not deductible. So if you incur losses on these assets, they are not deductible. Okay. If you have gains, they are deductible. Okay. Now, once recognized, gain or losses have been determined. They must be classified as ordinary or capital. So basically what you have to know is you, you, you computed the gain or a loss that the next thing you have to determine is, is this an ordinary or is this capital? Remember, because they are treated differently. Ordinary gains are fully taxable. Okay. Ordinary losses are fully deductible. So notice, if it's ordinary asset, not capital asset, and you incur the loss, which is basically a business asset, then it's fully deductible. Capital are not. Capital losses are not that if it's ordinary, then it is. Okay. So what happened with capital gains and capital losses? Let's talk about capital gains and capital losses. When you have a capital gain and capital losses, they are basically subject to four treatments. You could have four possibilities when you have a capital gain and capital losses. Okay. And in case you're wondering, well, we'll talk about this later. Okay. What are those four treatment? One, you could sell something and you could have a gain, a capital gain, and it's called short-term capital gain, STCG, short-term capital gain. You can sell something and you could have short-term capital loss. So you sold it. Now, how do we determine if something is a capital gain or a capital loss? If you hold it up to less than a year, well, year is included. So let's see, maybe do this one year. So if you hold the asset for one year or less, so one year is included. So up to one year, it's still short-term. Okay. You have to hold it more than a year. Or you sell an asset and you could have a gain, but if you hold it longer than a year, you could get treated as long-term capital gain. Or you could have an asset and sell it and incur a loss, but you hold it more than a year. So here it's a greater than one year, not equal, greater than one year, not equal to greater than or equal. It's greater than one year. Okay. So what are the treatment? Now, we have to know the treatment. So here are the rules as of 2018, which is the most recent according to the Job Tax Cut and Jobs Act. Okay. Now here's the classification. If something happens to be short-term, short-term, it is held one year or less. What you would do is you would use, it's going to be taxed as ordinary income. So OI. Now you're saying what is ordinary income? Let me show you what ordinary income is. Do you guys remember this table? This is for a single individual. Happens to be for a single. Okay. So what happened is you have a short-term capital gain. Guess what? It's going to be included with your regular income and subject to this table. Okay. So this is what we mean by this. So depending on what your tax bracket is, it could be subject to 10%, 12%, 22%, 24%, 32%, 35%, 37%. And that's why it says here the maximum rate that you could pay is 37 on short-term capital gain. Why? Because it all depends on where you stand. So short-term capital gain, think of them as ordinary income. It's like your salary. They're treated as your salary.  They could be taxed up to 37%. The rate is not 37%. If you are in the 37% tax bracket, it means you're making above half a million dollar in taxable income. You have more than half a million dollar. Then they are subject to 37%. So please be aware of this. Okay. Let's go from short-term capital gain to long-term capital gain. What do we do now? Actually, before we jump in, if we have any collectibles, antiques, arts, stuff like that, these are called collectibles. They are subject to a special treatment. And not special treatment. They are subject to 28%.  But generally speaking, if your tax rate is higher than 28%, they will be taxed at 28%. Don't worry about this section 1250 gain. We'll discuss this later on. Okay. So if it's not collectible, it's all other long-term capital gain. Okay. So how do we tax all other long-term capital gains? So we know short-term is easy. Just basically take whatever your ordinary income and it will be applied to that. We have three rates for all other long-term capital gain. You may not pay anything on that. You could pay 15. You could pay 20. So what is long-term capital gain? You held that capital asset for longer than a year. And here's how it works. When does the 0% applies? It applies if your taxable income does not exceed 77,200 if you're married, filing jointly. If you're married, filing jointly, you have a long-term capital gain and your taxable income does not exceed this amount. Guess what? You get 0%. If you're single, it's 38,600. If you're ahead of a household, 51,700. Okay. So simply put, if we look at the tax bracket, simply put, what is, let's look because we have the single. The single is 38,600. So simply put, let me just show you here real quick, 38,600 is up to here. Okay. So if you're in the 10 or the 12% tax bracket and you have a long-term capital gain, you don't have to pay taxes on that. Simply put, the short cut of it, the short cut of it. Okay. When does the, so we figure out that 0%, when does the 20% applies to your long-term capital gain? The 20% applies if you are, if your taxable income exceeds, notice here it doesn't exceed it, slower than that. Here, if your taxable income exceeds almost 480,000. So if your taxable amount is about 479,000, if you're single, I'm sorry, if you made it final and jointly, if you are single 425,800, if you're ahead of a household 542,400, made it final and separately 239,400. Okay. So you'll pay 25%. If your taxable income is more than 425,800. Simply put, once you reach, if you want to think about it, 425 is in the upper range of this. So 425 is between 200 to 425. So once you are basically, once you are midway through your 35% tax bracket, okay, then you are treated, then any long-term capital gain will be subject to 20%. So let me just draw a line here. It's not exactly here, it's at 425, at 425 as a single. My pen is not working properly now. 425, okay, 425,000. If your taxable income is 425,000. So not precisely 35, but on the upper range of 35. Okay. What we're left with is those three tax brackets, which is 22, 24, 32, and a little bit in 35. Those tax bracket, if you fell in those tax bracket, your long-term capital gain is 15%, okay, it's 15%. So hopefully we understand how, what we mean by if you have long-term capital gain, how much do you pay on that? Well, it all depends on where you stand. In which tax bracket do you fall? Do you fall in the first two? Okay, here you pay zero. Not precisely here, but starting at, when you, toward the end of 35, you will start to pay 20%, and in between you'll pay 15%. Remember short-term capital gain, they're taxed as ordinary income. You don't have to worry about those. Okay. Now obviously we're going to have both gains and losses, long-term and short-term in the same year. So what do we do? Well, gains and losses from capital asset transaction must be netted. We basically have to kind of cancel them, not cancel them, net them against each other. So what we do is this. We'll take the net gain and net losses by holding period. So the first, the first we do that. So basically we'll take short-term, short-term capital gain versus short-term capital loss. Then we'll do long-term capital gain versus long-term capital loss. So we take each holding period and we'll net it out. Now we might have a positive short-term and negative long-term. Well, then we net them out. Okay. If access losses result, they are shifted to the category carrying the highest tax. Well, if positive, then it's positive. Then we have to pay taxes. If it's negative, then what we do, and we go to the collectibles if we have any collectibles and we'll start to net it out against the highest tax rate. So we just keep netting out until we have only either a gain or a loss. A net short-term gain or a net short-term loss or a net long-term gain or a net long-term loss. At the end we'll have it one. Okay. But first we net each group separately, then we net them against each. The best way to illustrate everything that we learn about is to kind of look at examples to see how this works. We have Seema owns a pizza parlor during the current year. She sells two automobiles. The first automobile which was used as a pizza delivery car for three years was sold at a loss of 1,000. Because this automobile is an asset in her business, Seema claims an ordinary loss deduction of $1,000. Why? It's a car. But that car is being used in her business. Therefore, it's not a personal car. It's a business car. Therefore, there is a loss of 1,000. Okay. The second automobile which Seema had owned for two years was her personal car use. It was sold at a gain of 800. The personal car is a capital asset. Therefore, she would recognize $800 on the personal car. Now, if she sold that personal car at a loss of 1,000, that second car, what can we do with the loss? Nothing because the personal use car cannot be used. Okay. So the business car, she sold it at a loss and she deducted the 1,000. Obviously, if she sold it at a gains, she'll have to pay also gains on that. Okay. But I don't think you'll be able to sell a car delivery pizza for a gain, right? Because it's going to be used up, abused. So by the time you sell it, you cannot sell it for how much you bought it at. Okay. Just FYI. And here we are ignoring any depreciation, recapture or anything like this. Okay. Just very simple, keeping it simple. Just to differentiate that a car. So notice a car could be a business for business use. Or a car could be for personal use. And the way it's treated, that's two separate, two separately. Okay. Let's look at another example. Paulie is a single and report taxable income of 35,000. She also report the following capital gain. So she has taxable income of 35,000. Robin, corporation stock held for six months. So they had a gain of a, they had a capital gain of 1,000. This is short term. They have a capital. They have another capital gain for another 1,000, but this is long-term held for 13 months. Okay. So Paulie is in the 35% tax bracket. Let's look at the long-term first. Let's look at the long-term first. Long-term. 35%, I'm sorry, 35,000. 35,000 falls in this tax bracket. This tax bracket is 12%. Do you guys remember what happened to the long-term capital gain if you're in the 10 or the 12? If you're in the 10 or the 12, you pay zero on that. So the first $1,000 doesn't have to pay anything on this. Why? Because it's long-term and he happens to be in the 30, 12% tax bracket. So basically 1,000 times zero. Now for the other 1,000, well, if that's the other 1,000, well, we just look at your tax bracket. Your tax bracket, we just saw it's in the 12% tax bracket. Paulie in the 12%, because the 35,000 is in the 12% tax bracket. Therefore, Paulie will pay 12% on that other $1,000 on the short-term. Okay? Now, let's look at a third example. Assume the same fact except that Paulie regular tax bracket is 32%. Okay? Not 12%. So let's go back up here. Now what we're saying is, Paulie falls within this tax bracket. Okay? This tax bracket, I'm telling you right now, the long-term is, any long-term is 15. Any long-term is 15. So the 15,000 and the other, and the other 1,000, it's going to be subject to Paulie's regular, regular ordinary tax. So the short-term $1,000 will be subject to 32% because that's Paulie's tax rate. So the short-term times 32%. The long-term times 15%, because it's in the 32% tax bracket, 15%. I apologize. My pen is not working properly, but hopefully you can follow. Okay? Therefore, 1,000 times 32 is 320, and 1,000 times 15 is 150, and that will be Paulie's tax bill. Let's take a look at this example. Collin in the 32% federal income tax bracket and report the following capital transaction. Okay? Penguin corporation stock held for eight months. This is a short-term $1,000 gain. Owl corporation stock held for 10 months. This is a short-term loss. Stamp collection held for five years. Remember, this has a special bracket. This is stamp collection is 28%. And land held as an investment. That's again, that's long-term gain. Okay? So what do we do? Remember, we'll take each group and we'll start to net them out. So the Penguin short-term capital gain of 1,000 is offset by the Owl short-term capital loss of 3,000. So what we do is we cancel those two, and what we have is negative 2,000 short-term capital loss. Okay? Then what we do, since we have a short-term capital loss, the short-term capital loss, it's going to start to cancel out the other gain. But how do we do so? We do so against the highest rate. Okay? Now remember, the collectibles are subject to 28%. The land, how much are we going to pay for the land? Well, if he's in the 32% tax bracket, he's going to pay on that land 15%. Therefore, what's going to happen? The $2,000 of the short-term capital loss, it's going to offset the stamp collection. Okay? So the $2,000 then applied against the collectible gain of 2,000, as that's the capital gain that's subject to the highest tax rate, because the collectible are subject to 28%. We're going to use the loss. So basically, the loss will eliminate the stamp collection, and the loss is gone. What do we have at the end? We have 4,000 left of capital gain, long-term capital gain. Colin in the 32% tax bracket. Colin will pay 15% capital gain tax on that. Okay? So 4,000 times 15%. And this is the tax that Colin will pay whatever that tax is. Okay? The last thing we need to talk about is what happened if we have a net capital loss and net capital loss. So this is a special rule. If we have a net capital loss of individual, they are deductible. And here we're talking about if you have losses and stocks, up to $3,000 yearly. So you can deduct net capital losses for individual for AGI up to $3,000. So you can deduct up to $3,000 against your ordinary income. If you have more than 3,000, excess capital losses are carried to the next year. When carried over, capital losses retain their classification as either short-term or long-term. So if you have any losses, you don't lose your capital losses, you can carry them. You can deduct $3,000 this year. And this is personal. I'm going to make sure we are talking about personal because when we talk about corporate, it's totally different. This is what we're talking about personal individual taxpayer. Okay? Tina reports a short-term capital loss of $2,000, a long-term capital loss of $2,500, and no capital gain. So Tina has short-term loss and a long-term loss. She has both total of $4,500. She can deduct $3,000, which is the $2,000 short-term and the $1,000 long-term of this amount as ordinary loss. Okay? It gets ordinary income, which is good. And the remaining $1,500 is carried forward to the future as long-term capital loss, long-term capital loss. So simply put, capital losses you can deduct as an individual up to $3,000, up to $3,000 against your ordinary income. If you have any questions, any comments by all means, email me. This concept, everything that we learned here is important. I'll tell you why. Because we're going to be adding more complication. We're going to be selling different assets. So you want to make sure you understand the concept of realized versus recognized. Also, down the road, we're going to be dealing with a corporation. And corporations will have capital gain and capital losses. So we have to know the rules, the difference between the two. So make sure you understand the personal. Again, we're going to revisit this topic in much, much more in details in future chapters. Actually, we had two chapters devoted for property transaction. But since we have to touch upon it at the beginning, so this is basically a brief overview. But I believe it's a comprehensive brief overview. If you're studying for your CPA exam, study hard. If you're studying for your income tax course, study hard. If you need more lectures, go to my website. If you happen to visit, please consider donating. Good luck and see you on the other side.


Dear students, in this topic we shall discuss adenyl glands. Mammals have two adenyl glands. These glands are attached to the upper end of each kidney. The adenyl glands are in fact dual glands. Each gland has two glands in each as an outer layer and an inner layer. The outer layer is known as the adenyl cortex whereas the inner central portion is known as adenyl medulla. These two portions of adenyls have different cell types, different functions and different embryonic origins. The cells of adenyl cortex are true endocrine cells. They are derived from non-neural mesodermal tissue. The cells of medulla are derived from epidermal neural tissue during embryonic development. So both tissues are embryologically different. These medullary cells are functionally related to the sympathetic nervous system. Thus, like pituitary gland, each adenyl gland is a fused gland with endocrine and neuroendocrine glands. Dear students, now we shall discuss the hormones of adenyl cortex. Adenyl cortex produces two major classes of steroid hormones. One are called the glucocorticoids and the other are known as mineralocorticoids. Collectively, these two classes are called cortico-steroids. These cortico-steroids are involved in iron and glucose regulation in blood. They are also involved in anti-inflammatory reactions. Dear students, adenyl cortex, in two types of steroid hormones, a third group of steroid hormones are produced, which are steroid sex hormones, androgyns, astrogyns, and progesterone. The main source of these hormones are gonads, but their small amount is produced by adenyl cortex.  Dear students, now we shall discuss the hormones produced by adenyl medulla. The adenyl medulla synthesizes and secretes catecholamines, that is epinephrine and norepinephrine. These hormones are secreted under nervous control, and they are released through visceral motor stimulation. Dear students, adenyl medulla cells are called chromophine cells, which are produced by catecholamines. These chromophine cells are said to be a dye, which is stained with a dye, which is chromium salt. These cells are actually modified post-ganglionic, sympathetic neurons. Chromophine cells produce norepinephrine and epinephrine. Those cells, which produce norepinephrine, have dark staining irregular granules. And those chromophine cells, which produce epinephrine, have light staining spherical granules.


have to do that for a couple of weeks and I don't mind at all.


Hi, I'm Dr. Gene Preuss, and in this lecture, we're going to look at the thesis developed by Dr. Frederick Jackson Turner and the birth of American Western history. Turner developed his thesis and we want to know why it's important. So in this lecture, we're going to look at Turner's thesis, provide a summary of it, explain why it's so important, and look at new directions that historians have gone in since Turner's thesis.  Well, there's also hypothesis, there's also thesis behind history. History is interpretation. And so theory players play a part in that. But the idea that theory, as in this quote, a body of theorems presenting a systematic view of an entire subject, has kind of gone out of style. We call this a meta-narrative, and as far as here, historians are concerned, we're in a post-modern age. Most historians don't see one big theme connecting all aspects of history together. So we've kind of moved away from that idea. Now we do believe that they help build a conceptual framework and that they help us ask questions and then in answering those questions that we ask, so that does help us. But we have to remember that theories are shaped by our present world view and actually anything we do in history is shaped by our present world view. It's how we interpret the past through our eyes today. Now that doesn't mean we project our values on the past. Historians try to avoid doing that. But it does mean that because it is really history is seen through today's eyes, there's always going to be reinterpretation, always going to be reanalysis, and it's always going to be redone. So let's look at Frederick Jackson Turner, his photograph is here. In 1893, the Chicago World's Columbia Exposition, this was a World Fair, the American Historical Association, a new organization at the time was meeting and Turner delivered a presentation about the significance of the frontier in American history. Now he based this off of a report by the superintendent of the 1890 census and the superintendent had written in the census that up until the 1890s, you could see on maps a frontier line and these frontier lines were marked by population of more than two people per square mile. That was the demarcation line. And what he said is that up to and including 1880, that census, the country had a frontier line of settlement. But currently by 1890 there had been so much settlement in so many different unsettled areas that that line was broken now and there can hardly be said to be a frontier line. Then he said that the frontier line can no longer have a place in census reports. Now this statement concerned Turner. And what Turner did, influenced by this 1890 census and influenced by the Darwinist at the time, remember Darwin in 1860 developed this theses of evolution, and so he kind of applied, Turner kind of applied this idea of evolution to American history. And he said that the frontier is the central theme of American history. That American social development has been continually beginning over again on the frontier. So you have this idea of the evolution of American society. And he saw frontier as process, this idea of wherever there was a change going on between the people who were indigenous and the new people moving in, this was where the frontier was. And he also saw it as progress, this idea that American history, well, that any history, is a unfolding of progress as it should be. He also believed, and another reason why he's important, is that he sees American history from an American perspective, not a continuation of European history, as many historians before Turner had seen it, that, you know, you brought over these Germanic people who settled in this new world, and they were just extending their concepts, their traditions. Now what he said, Turner, was that we need to look at it as an evolving American perspective of history. He also noted that whenever you look at what the frontier is, it's the outer edge of the wave of the meeting point between savagery and civilization. And he said the frontier was constantly evolving because it's this continual struggle of man versus nature, and that's what creates American people. So an idea of nationalism, an idea of independence, an idea of democracy, he also said that the frontier was necessary because it was a safety valve. When civilization got too crowded, you could always move people west, and that also affected American culture. Since then, people have disagreed mightily with Turner. Turner's view of history, a lot of his critics have said, and you had critics very early on, said it was too Anglo-centric and only focused on European migration. It only focused on American white Anglo-Saxon Protestant expansion, that it was too male oriented, that it only focused on men and women were left out of the process altogether, that it had this idea of progress, that American history was unfolding towards the better. Now this is a very what we would call a wiggish interpretation of American history. The things were always getting better, and this comes out of the British term of the wigs, and also an American political term, the wigs. And it was this idea that progress was always happening, that history was the unfolding of this planned progress. And he looked at the frontier as being process driven. It was this process of change of savagery and civilization meeting, and wherever that was, that's where the West was, that's where the frontier was. But new historians almost immediately came up in the 1920s and 30s with the West as a place. For example, Herbert Eugene Bolton, in his book The Spanish Borderlands said, instead of looking at it from a European or New England perspective, we need to look at American history from the Spanish perspective. The Spanish had colonized and settled the New World a hundred years before the British or the French came over. And so we needed to look at it from a Southwestern perspective, not a New England perspective, American history that is. And then you have Walter Prescott Webb, another historian, a Texas historian, his book The Great Plains looked at the West as a place. In the West you had the role of environment, playing in a very important role because it was always dry, people were fighting against drought, they were fighting the rugged different types of soil, the rugged environment, and it was the role of environment in history was new, and Webb was one of the first to come up with this and the idea of the West shaping the environment, and the environment shaping the West. Since then, since about the 1980s, we've seen what is sometimes called the New Western history, and this was looking at race, class, and gender, and trying to infuse those elements into American history of the West. And Patricia Nelson Limerick, one of the books you're reading, The Legacy of Conquest, was a pioneer in that effort. In 1987, she said the West was where these cultures met, but there was a conquest, there were people who were victors, there were people who were victims, and yet we needed to look at those ideas. And so this brings in a lot of issues of race and class to Western history. Richard White in his book, It's Your Misfortune and None of My Own, he said that the West is a place where we should not look at the idea of frontier, and in fact he never uses the word frontier in his book, showing a market transition from Turner's idea of the frontier in the American history process. And so White never uses it trying to get totally away from Turner, but not everybody has been so lucky, and a lot of people start off Western history with Turner's thesis and go from there. And so if you want to summarize what we've talked about this morning, we're looking at Turner's thesis that it was an idea of American culture, society, and government is rooted in that frontier experience, that idea of the ever-changing frontier experience, and so the frontier is central to American history. And if we want to explain its significance, Turner not only called for an American interpretation of history, but he laid the foundation of course for the history of the American West. And since Turner, new directions have evolved, and historians have started looking at the West as a place instead of a process. They have looked at the multicultural, multi-ethnic, multi-class conflict and cooperation going on in the West. They have looked at the hardship and the promise of the West. And so there's always new avenues for divergence from Turner's thesis and new ways of looking at Western history, and hopefully we'll explore some of those in this course. Thank you very much.


Do I have to put my hand up to ask questions in class? Yes. Just don't put your hand up and ask to go to the bathroom. Yeah, you can just go. Just go. Do you have to put your hand up or do you yell at the person's name? I mean, you don't have to. You can just shout it in class if you want it to. Don't be that guy that just yells out at the lecturer. I don't know if you're meant to, but I just ask. Okay, so I still do that because that's me, but you don't have to. Normally they're willing to have these interactive classes. They really want students to engage with what they're teaching, so it's not kind of a one-way thing.


What's the word, y'all? I could not believe what I just witnessed. The NBA All-Star starters were announced live on TNT. And you know what? I liked the way they did this year. They didn't allow wolds or shams to spoil it. They had somebody with a briefcase, and it was the first time that the whole world had seen it. I liked it like that. There was some anticipation behind it. Wiggins is an All-Star starter. This is a big one here. Andrew Wiggins of the Golden...  And Andrew Pember. Listen, if you look at every single one of the returns that came out as they allow fans to get 50% of the vote, Wiggins had been top two, top three, top four when it come to front court the entire time. And people are saying that the K-pop stands got into there and the courts, you got the Dub fans, you got all of Canada, he's got a good fan base. But never in a million years did I think that even though he was top whatever when it comes to amount of votes, that he was going to be an All-Star, let alone an All-Star starter. And the fact that he is in there, the NBA might have to change some things. Now I do want to say congratulations to Andrew Wiggins and his family being an All-Star is something that people dream of. I mean, he's the guy that was drafted first overall, had a good rookie season, and then it just seems like the narrative around Andrew Wiggins was at empty stats, he does an equal winning, he's a poor defender, and a lot of those things have changed since he got to the Warriors.  You can disagree, that's completely okay. About a month ago I put together my All-Star ballot and we were going through it and Wiggins was not on my list. And one of the top comments on it was like, Kenny, you gotta give Wiggins the respect. And I respect Wiggins as a basketball player, but in my mind, when I watch the go to stay Warriors, when I watch NBA as much as I do, Wiggins is not on the tier of the NBA All-Star players. It definitely not in the starters. Now again, the starters are by the fans and the media and the players, I'm just so surprised that he got enough players and enough media to say, Wiggins deserve to be there. And I guess he didn't need that many because the fans rolled with him like that. I thought this was about to be a little Zaza opportunity thing. Now obviously Wiggins is a million times better than what Zaza opportunity was when he had the whole country of Georgia behind him, right, country of Georgia? It's just weird. And Adam Silver, we gotta rethink about these percentages, my boy. Maybe it's 33, 33, 33 and then you, you Adam Silver give 1% because this is kind of wild. Now if you remember my video when we were doing my All-Star selections, I vividly said that last front-court spot is so hard to pick. I think I ended up giving it to Draymond as teammate. So the word is about to have three All-Stars. So he started to tell me during my green being out with his injuries, them having two All-Star starters and they could barely get. So I think I gave it to Draymond Green as a starter, but even then I was like, it could be anybody. I didn't mean that literally. I definitely didn't mean that literally. So there's a couple of things that could be reformatted to prevent stuff like this from happening. Again, I don't wanna take away this moment for Wiggins because I know he is on Cloud nine, his family is on Cloud nine, the nation is on Cloud nine and everybody that is rooted for Wiggins for the entirety of his basketball career is on Cloud nine. But let's keep it a buck. You gotta be, look at the players that are also All-Star starters and compare Wiggins to them. I asked, because I did a live reaction, is Wiggins going to be the last person drafted in the starters and my guess will probably be yes, unless Kevin Durant or Brian really mess with Wiggins on a personal level. And there is a meme that like people always ask, who is the worst player to ever make an All-Star appearance? And the last couple of years, people have been saying, it's the Montess of Bonuses, the Montess of Bonuses, the Montess of Bonuses. Wiggins has hit that conversation because the Montess of Bonuses was still like the number one on the team.  Wiggins is number three on this team, the number three most important player on the, on granted, a really, really good team, but still number three. And it's not even like number three on the greatest team of all time. This is not a Steph Curry, Clay Thompson, Draymond Green, 73 and nine type team. This is a team that started off amazingly, but since then have slowed down just enough for them not to have the best record in the league. The Suns don't have a single, I think it was Charles Barkley, Kenny DeGestman. It was like the Suns don't have a single All-Star as the best record in the league or starter. Which again, I'm not saying that Deepbook deserved to make it over the other backcourt players or Chris Paul deserved to have it over the other backcourt players. But this is the thing that I'm saying. When it comes to these things, we're playing in the game of positionless basketball anyway. Let's get rid of it. Let's get rid of it. Cause I can name, I can name seven, seven guards that are more worthy of an All-Star starter spot than Wiggins is. But since Wiggins is a front court, hey, there it is.  But if you go on Twitter, the number one to anything, it's Wiggins at the end of the day. It doesn't, none of this really matters. It just adds something to Wiggins's resume, you know? Whose spot that he take. I don't know, Paul George is injured. So he might not have been playing anyway. And I'm not really thinking about it like that. I'm just trying to put him on the same playing field as the other players that were announced. First of all, amazing fire, whoever did this amazing. How did you, how did they do it so fast? Cause the way they told us, nobody knew these things. They just completed this like five minutes ago and they already had this graphic. Now you could have probably guessed like one, two, three, four, five, six, seven were guarantees. Like I said, there was a coin flip between like John Miranda, maybe book or maybe not even mentioned, but John Miranda's turning up so much recently that it makes sense that he's here. It was between Trey Young and Zach Levine. So maybe they already had this spot depending on whether it was Trey or whether it was Zach. Wiggins, this reminds me of the Clay Thompson All-Star picture. So it's all in the family. At the end of the day, it doesn't really matter. Congratulations to Andrew Wiggins for being an All-Star.  And again, I don't think he deserves to be a starter, but I'm not the mean in the fact that he is a quality NBA player and one of the most important players to one of the best teams in basketball. So shout out to him. Congratulations. I cannot wait to watch the draft. Last year they was, they was owning when it came to the Utah Jazz at the end of the like the overall draft. I wonder what it said or done about Wiggins when it comes to the starter draft. Let me know in the comment section, is this the right move or is this the wrong move? How do you feel? I'm always down there reading stuff. So I'll be there.  I forget that my boy Mark Eversley works with the Bulls. I forget the general manager name. He came from Constance something. I can't even pronounce it.