This kind of post should bring in a great prospect or client who would like to take action, but has not, because they are not current on how taxation of capital gains works. Post the information below and give them a heads-up or reminder.
Does the IRS really have “Yard Sales?” Yes, all the time!
The tax code is much more fluid than the public is truly aware of and deductions and credits come and go all the time. Deductions like mileage for business owners change with the cost of gasoline, for instance, and can go up and down annually. Often it is actual programs that come and go, like energy tax credits or being able to transfer an IRA to a charity directly without paying income tax but still satisfying RMD requirements. Often these programs are temporary, and depending on whether the government believes that they have met their objectives, sometimes expire, or may become permanent.
Capital Gains Tax
Capital gains taxation is one of those items. It’s been changed over the years, but under the original Bush tax cuts was dramatically reduced, and then what was intended to be temporary has been extended again and again, with only one small alteration last year effecting the very top income earners. A totally misunderstood gem, most of the public thinks the tax would be substantial, so they are not taking action on capitalizing a gain, even though for the most part the tax would be less than what they imagine, often resulting in no tax at all! Real estate, stock portfolios (which are at an all-time high range) that likely should have some profit taking and other items that receive capital gains treatment should be closely examined, and a tax forecast completed to calculate the actual gain for clients, to replace what is imagined with a real number! Even people in “zero tax brackets” should do this to step up the cost basis on items, potentially free of tax!!
Although this may sound complicated and expensive, it is actually EASY AND FREE!
Call our office and make an appointment, and we will have one of our CPAs calculate the tax on any item you have if sold and we’ll give you the tax forecast to take with you to show your current preparer or planner to have them verify the number. We want to educate our community so they can make good decisions based on fact, not fiction!
Call______________ or e-mail_______________ and let’s get you informed!
Advisors, you should also do this for yourself!
As Always, You`re Welcome
The Tax “What-if” Dr;-)