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Time to sell some stuff? TAX Increase Plans
Old 11-05-2009, 07:16 AM   #1
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Time to sell some stuff? TAX Increase Plans

Taxman Seeking Cash Means U.S. Filers May Move Income to 2009 - Bloomberg.com
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Old 11-05-2009, 10:26 AM   #2
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I have done a lot of selling this year and will continue to do so into 2010. I suspect that our taxes will be going much higher starting in 2011. So we are taking advantage of the rebound in the stock market to liquidate some company stock and stock options, paying lower taxes on the large gains, and redeploying the money in a more diversified and tax-efficient portfolio. We will probably be saving a lot in taxes by exercising our NQ stock options before 2011. Our marginal tax rate will be going up in 2011, and between the risk of surtax and possibly the uncapping of the SS tax for the "rich", we could be saving tens of thousands of dollars by being proactive. DW's company is also planning to pay the 2010 bonuses at the end of 2010 instead of the beginning of 2011.
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Old 11-05-2009, 10:45 AM   #3
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Not much I can sell at a gain just now. Selling at a loss would just decrease the tax basis for anything new I bought now and sold in the future. So I'll probably just stay as is. I also have plenty of capital loss carryover to last me a few years already. No need to use that up this year when it may be more valuable in the future.
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Old 11-05-2009, 12:18 PM   #4
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I will sell all losers before year-end. Guess what? So far no losers since the market has been on an upward trajectory since March. Of course, I have plenty of cap loss carryovers, so I don't imagine paying cap gains taxes for quite a long while anyways. Maybe even decades.

I guess another way to be pro-active on taxes is to simply retire early because those with no income don't pay taxes.
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Old 11-05-2009, 01:10 PM   #5
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I guess another way to be pro-active on taxes is to simply retire early because those with no income don't pay taxes.
We should reach FI in 2012 and I plan to retire then. DW doesn't want to pull the plug that early though (something to do with ambition and career...I don't know what she is talking about), but it should help reduce the tax bite somewhat.
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Old 11-05-2009, 01:25 PM   #6
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I can't see accelerating capital gains, since you may get by until rigor mortis sets in without needing or wanting to sell them. Maybe this is a shortsighted view, but it would be hard to overcome for me.

Incidentally, I found an old HP 97 tape showing 5 digit capital gains every year for the 15 years from about 1983. Without getting out all my old 1040s, I think I have realized capital gains of $1x,xxx or more every year, including 2008 and 2009 (2009 already realized, unless a very big market break would serve up some late losses to offset them).

To me, taxes are an evil, but not as evil as losses.

Ha
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Old 11-05-2009, 09:32 PM   #7
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I can't see accelerating capital gains, since you may get by until rigor mortis sets in without needing or wanting to sell them. Maybe this is a shortsighted view, but it would be hard to overcome for me.

Incidentally, I found an old HP 97 tape showing 5 digit capital gains every year for the 15 years from about 1983. Without getting out all my old 1040s, I think I have realized capital gains of $1x,xxx or more every year, including 2008 and 2009 (2009 already realized, unless a very big market break would serve up some late losses to offset them).

To me, taxes are an evil, but not as evil as losses.

Ha
I agree Ha I wished I paid more in taxes now than I do...
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