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Long term cap gains question
Old 12-18-2017, 08:10 AM   #1
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Long term cap gains question

So DW decides she misses the office dynamics of a large corp...I know, crazy...

If she gets the job she thinks next year, it will likely push us up to above the 0% on LTCG tax that we may be able to do this year. I'm thinking if I get all the deductions (2 years of prop tax) and IRA / 401k / HSA pre-tax benefit, I may be able to get us just in under the $75,900 this year.

I'm thinking of selling a stock that we have some gains on (not a lot, say $3-4k) and try to take advantage of this year's 0% tax on this.

Any thoughts out there on this?

Thanks in advance!
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Old 12-18-2017, 08:30 AM   #2
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When you say $75,900 you know you are talking taxable income, as the gross income would be nearly $100K ?

Depending upon how many stocks you have, it's fine to sell even if you go into the 15% rate on some portion of them, if you need the money then do it.

If this is simply to do LTCG harvesting to update the stock basis, then yes, sticking around the 0% rate is good, and if you sell the stock for a little more, and a tiny part of it is at 15% , that is ok too.
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Old 12-19-2017, 12:34 AM   #3
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If the new tax bill passes and you take the standard deduction and you are married your 0% LT cap gains ceiling extends to $101,400 so maybe you want to move your sale into 2018 where you might have a little more overhead
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Old 12-19-2017, 09:14 AM   #4
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0% is 0%. No sense in waiting if it is there this year. There may be new opportunities next year.
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Old 12-19-2017, 11:05 AM   #5
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Low income years are an opportunity to harvest LTCG (to sell appreciated assets, and optionally re-buy) or to do a partial Roth conversion. If you're already close to $75,900 in taxable income, you donít have much room for more income. Keep in mind that the capital gains or Roth conversion count as taxable income, and the total needs to stay within the 15% bracket for LTCG and qualified dividends to be taxed at 0%.
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Old 12-19-2017, 11:40 AM   #6
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Iíve sold plenty of stock with LTCG taxes at 23.8% this year. I donít let the tax tailwag the buy/sell decision dog.
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Old 12-19-2017, 05:24 PM   #7
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Thanks all. Looks like we'll be taking a chance on doing it...
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Old 12-19-2017, 10:26 PM   #8
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Quote:
Originally Posted by RenoJay View Post
Iíve sold plenty of stock with LTCG taxes at 23.8% this year. I donít let the tax tailwag the buy/sell decision dog.
Impressive...

I agree, I sold some stock even if I have to pay 15% ( plus State tax ) on it, as I wanted the cash, and the stock is at a record historical high.
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