|
Posted by Rich Carreiro on January 26, 2008, 9:33 pm
So, what are you advisors telling clients with significant unrealized
long-term capital gains? Are you telling them to sit tight no matter
what, or have you thought about recommending they realize some/all of
those gains soon (perhaps this year) while the LTCG tax rate sits at
15%.
Leaving aside the wisdom of rate changes (since that's not a suitable
discussion for this forum), if Obama (or, ghod forbid, Edwards) gets
elected this November, seeing significant increases in LTCG tax rates
is a distinct possibility in 2009 and a near-certainty by 2011 (when
the current rates sunset absent extension).
True, the concept of tax deferral is very important, but how much is
that overridden by a 15% rate now, vs. a 28% (or perhaps even higher)
rate in potentially the not-too-distant future?
--
Rich Carreiro rlc-news@rlcarr.com
|
|
Posted by joetaxpayer on January 26, 2008, 9:52 pm
Rich Carreiro wrote:
> So, what are you advisors telling clients with significant unrealized
> long-term capital gains? Are you telling them to sit tight no matter
> what, or have you thought about recommending they realize some/all of
> those gains soon (perhaps this year) while the LTCG tax rate sits at
> 15%.
Rich, I can't find the details, but I recall a provision that allowed
one to claim the gain as if a stock was sold 12/31 and raise the cost
basis to the claimed 'sale' price. i.e. They'd take advantage of the
LTCG without having to actually sell and buy the stock back. Anyone else
recall this option?
JOE
|
|
Posted by Rich Carreiro on January 26, 2008, 10:35 pm
> Rich, I can't find the details, but I recall a provision that allowed
> one to claim the gain as if a stock was sold 12/31 and raise the cost
> basis to the claimed 'sale' price. i.e. They'd take advantage of the
> LTCG without having to actually sell and buy the stock back. Anyone
> else recall this option?
That was a one-time deal back in 1998. Can't do it now.
Or rather, to do it you actually have to sell and repurchase
the investment (and no, there's no "wash sale" rule for things
sold at a gain).
--
Rich Carreiro rlc-news@rlcarr.com
|
|
Posted by jIM on January 26, 2008, 9:57 pm
).
>
> True, the concept of tax deferral is very important, but how much is
> that overridden by a 15% rate now, vs. a 28% (or perhaps even higher)
> rate in potentially the not-too-distant future?
>
> --
I am not a professional, and most of my investments are tax defferred.
My thought would be
a) you need another investment when "cashing in" (if you need money of
course cash out)
b) assuming you have another investment, cash in some of it because
the reinvestment in 60 days into something similar is being made at a
relative low point (assuming market movement in next 60 days is not a
huge Bull market run- no way to know for sure)
c) a doubling of tax rates should get some financial planning
attention
|
|
Posted by Rich Carreiro on January 26, 2008, 10:34 pm
> So, what are you advisors telling clients with significant unrealized
> long-term capital gains? Are you telling them to sit tight no matter
> what, or have you thought about recommending they realize some/all of
> those gains soon (perhaps this year) while the LTCG tax rate sits at
> 15%.
Just to be clear, I'm not talking about cashing out and having
the money sit in cash (or whatever). I'm talking about selling
the investment for the sole purpose of realizing the gain during
a low-tax regime and then repurchasing it immediately. In other
words, I'm talking about (in essence) stepping up the basis of
existing investments to current FMV at the cost of 15% of the
gain, as a hedge against significantly higher rates in the future.
--
Rich Carreiro rlc-news@rlcarr.com
|
| Similar Threads | Posted | | Places to put cash | February 11, 2007, 9:43 am |
| Fed cash injection | December 21, 2007, 3:28 pm |
| Retirement Cash Out...How BIG a Hit ??? | July 28, 2008, 4:01 pm |
| T-bill rates | September 13, 2007, 9:31 am |
| determining tax rates | February 12, 2008, 11:44 am |
| Re: determining tax rates | February 15, 2008, 4:42 am |
| "Cash" position within an IRA account | April 5, 2007, 4:01 pm |
| $12k gifts - cash vs 529 acct | January 30, 2008, 5:16 pm |
| refinance /cash out tax implications | February 9, 2008, 2:34 pm |
| ESOP payment into cash | March 7, 2008, 5:05 am |
|
|
Yahoo! 
Google 
Windows Live 
del.icio.us 
digg 
Netscape 
XML Sitemap