Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Capital Gains Question
Old 12-10-2013, 10:57 AM   #1
Recycles dryer sheets
 
Join Date: Aug 2009
Location: westerville
Posts: 242
Capital Gains Question

In tax planning for 2013 I found that one could take gains up to the 25% tax bracket and pay zero Capital gains federal tax if thier income was less than the 25% bracket. Thus we fall in in this catagory and want to take advantage and Harvest these gains while we can. My question is is there a wash rule on gains if one sells and buys back same security within 30 days of sale. I know in order to take a loss one must wait 30 days to buy back same security. I could not find rule if that applies to gains?
PS there will be a little state tax to pay here in Ohio.
Thanks in advance for insight.
__________________

__________________
Trawler is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 12-10-2013, 11:09 AM   #2
Full time employment: Posting here.
 
Join Date: Jan 2013
Posts: 660
In a word, "no". The wash rule applies only to losses, not capital gains.
__________________

__________________
karluk is offline   Reply With Quote
Old 12-10-2013, 11:15 AM   #3
Thinks s/he gets paid by the post
Rustward's Avatar
 
Join Date: Apr 2006
Posts: 1,572
No wash sale rule violation, but you could possibly violate a fund or brokerage's "frequent trading" rule. So be aware of those rules (if any) for your particular funds and brokerage.
__________________
Rustward is offline   Reply With Quote
Old 12-10-2013, 11:30 AM   #4
Recycles dryer sheets
 
Join Date: Aug 2009
Location: westerville
Posts: 242
Thanks!!
Karluk- that corfirms what I thought it just when ever I have sold for a gain have never entertained buying back same time.
Rustward-Thanks for the heads up on the possible trading rules.
__________________
Trawler is offline   Reply With Quote
Old 12-10-2013, 12:13 PM   #5
Full time employment: Posting here.
 
Join Date: Jan 2011
Location: Just North of Boston
Posts: 519
"No" is the right answer, but you do want to think about when you may sell them again. If you decide to sell the stocks within a year any gain/losses will be classified as "short term". Although, it will be off the new cost basis.
__________________
ChiliPepr is offline   Reply With Quote
Old 12-10-2013, 01:08 PM   #6
Recycles dryer sheets
 
Join Date: Aug 2009
Location: westerville
Posts: 242
Quote:
Originally Posted by ChiliPepr View Post
"No" is the right answer, but you do want to think about when you may sell them again. If you decide to sell the stocks within a year any gain/losses will be classified as "short term". Although, it will be off the new cost basis.
Chilipepr - Thanks Understood.
__________________
Trawler is offline   Reply With Quote
Old 12-10-2013, 01:15 PM   #7
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 2,928
Do you have carryover losses from last yr? If you do, you will be using them up w/
no decrease in taxes........just the basis increase.
__________________
kaneohe is offline   Reply With Quote
Old 12-10-2013, 01:25 PM   #8
Recycles dryer sheets
 
Join Date: Aug 2009
Location: westerville
Posts: 242
Quote:
Originally Posted by kaneohe View Post
Do you have carryover losses from last yr? If you do, you will be using them up w/
no decrease in taxes........just the basis increase.
Kaneohe- Thanks Understood. The good news is we will be living on cash savings account for next several years 3-4 with no real income other than dividends thus no taxes unless planned low taxes from IRA to Roth Rollovers. Wanted to get the large gains harvested now before any change to the tax code .
__________________
Trawler is offline   Reply With Quote
Old 12-10-2013, 03:01 PM   #9
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
Posts: 3,862
Quote:
Originally Posted by Trawler View Post
In tax planning for 2013 I found that one could take gains up to the 25% tax bracket and pay zero Capital gains federal tax if thier income was less than the 25% bracket. Thus we fall in in this catagory and want to take advantage and Harvest these gains while we can. My question is is there a wash rule on gains if one sells and buys back same security within 30 days of sale. I know in order to take a loss one must wait 30 days to buy back same security. I could not find rule if that applies to gains?
PS there will be a little state tax to pay here in Ohio.
Thanks in advance for insight.
Make sure that your income + capital gains total stays within the 15% tax bracket. I worry about your use of 25% and "income" here.

Other than that clarification, the IRS would be happy to get your money earlier rather than later. No need for them to make it tough on you.
__________________
Animorph is offline   Reply With Quote
Old 12-10-2013, 03:09 PM   #10
Recycles dryer sheets
 
Join Date: Aug 2009
Location: westerville
Posts: 242
Quote:
Originally Posted by Animorph View Post
Make sure that your income + capital gains total stays within the 15% tax bracket. I worry about your use of 25% and "income" here.

Other than that clarification, the IRS would be happy to get your money earlier rather than later. No need for them to make it tough on you.
Animorph- Thanks for the clarification on the brackets. I will have my accountant run the what if scenario to be sure we pay no fed tax.
__________________

__________________
Trawler is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 12:39 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.