If you are in the 25% bracket or higher, the tax rate on long term capital gains will be only 15% in 2010. If you wait until 2011 to sell, the rate is scheduled to be 18% or 20% depending on your holding period.
If you are in the 15% tax bracket or lower, 2010 is your last chance to sell assets held long term a a gain and pay no federal tax. State taxes may apply, however.
WHAT TAX BRACKET ARE YOU IN?
If your income including the gain is under $43,350 (single), $86,700 ( married-joint), or even higher if you can itemize or are over 65, you are in the 15% or lower tax bracket and a candidate for a free sale.
A little tax planning could save you a lot of tax.
Give us a call to review your situation. We may never have this opportunity again in our lifetime.
Let us know what you thought of this article.
Here are some sites that talk about this opportunity.
- Long Term Capital Gains Tax Rates Increase in 2011 (bargaineering.com)
- Relief at lower-than-expected rise in capital gains tax (independent.co.uk)