Law Offices Of Connie Yi, PC
Tell Us About Your Case

For the safety of our community, clients and staff, we have suspended all in-person meeting effective March 17, 2020. All consultation meetings will be via Phone or Zoom Video Conferencing. Please contact us at 925-484-0888 or email us directly at [email protected] to schedule the consultation.

Bay Area Estate And Tax Planning Law Firm
Estate Planning
Trust Administration and probate

Get
Started

Three capital gains tax questions to ask yourself

| Sep 30, 2015 | Capital Gains Tax |

Fall is here, which means it’s time to start thinking about year-end tax consequences, including capital gains taxes. Of course, you would never want to buy or sell investments based on tax outcomes alone, but it’s still a good idea to understand the tax consequences that you stand to face and plan accordingly.

It would be a great idea to meet with a tax adviser before the end of the year in order to get a strategy in place for selling stocks and collecting gains. Capital gains are a complicated area of tax law, which is why you will want to meet with a professional for personalized advice. In the meantime, here are some things to think about:

What are capital gains taxes?

Capital gains tax is applied to the profits realized on the sale of a non-inventory asset that was purchased at an amount that was lower than the amount the asset was sold for. The tax most commonly applies to the sale of stocks, bonds, precious metals and property. A different tax rate applies depending on whether the assets have been held for over one year before being sold.

Could you end up paying zero capital gains taxes this year?

If you sell or sold assets that you held for more than a year and you will make less than $37,450 in taxable income and are filing single (or less than $74,900 if fining jointly), then you may not be on the hook for any capital gains taxes. Considering that the maximum rate for capital gains tax is 20 percent, this is a major benefit.

Did you have capital losses as well as capital gains?

Many people have long-term capital losses and gains within the same year. It’s important to look at your overall losses and gains because you are taxed on the “net gain,” meaning you can deduct your losses from your gains. Some people choose to sell off assets at a loss in order to offset their gains. However, there are certain rules that apply here, so it’s important to only do this with the help of a financial adviser.

All of these issues and more were discussed in a recent article from The Huffington Post. Check it out here for even more capital gains tax issues to consider before the year’s end. 

Categories

Archives

FindLaw Network

Recent Blog Post

What are reasonable fees to charge as a trustee in California?

When implementing an estate plan in California, it is essential to ensure that you receive the proper compensation for the amount of time and work you are putting in. The probate court will look through the amount you charge to see if it is reasonable, especially if...

What to know about life insurance trusts

California families have an exemption for their estate that keeps it from being subject to income taxes. However, above that $11.7 million, the estate tax bill could get large. This is why they need to take measures to reduce the size of their taxable estate. Life...

Are estate taxes headed for changes?

Not every inheritance involves paying estate taxes, but some estates rise above the federal exclusion amount. California residents that feel familiar with state and federal tax rules might not realize changes could happen. Namely, proposals intended to raise tax...

View More Blog Posts