Kipk - The answer totally depends on whether the stock price acts as you propose or not. If you sell at $10 to rebuy at $5 (illustrative prices only), it is good to sell if it does go down like that. The tax is only a small portion of your gain and you end up with all or even more shares again or maybe cash in your jeans or both. The risk is that the price doesn't react as you hope. Instead of pulling back, it climbs more and costs you extra to get back in or you miss all together. In that case you would have been better to just hold. You have your shares for the climb and have deferred the tax until later. There is always risk and one has to decide what they think the price will do and what risk they want to take. Seldom is there a cut and dried best answer.