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Old 10-22-2012, 04:16 PM   #21
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Originally Posted by Texas Proud View Post
So, under you example, if I make an agreement with my boss that he can keep the money for 5 years and then pay me in a lump sum.... I should get cap gain tax rates
No, my example was on a physical property, that the laborer was working for 5 years with the possibility of sharing in the profits in 5 years, not the deferral of a guaranteed lump sum.

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Originally Posted by Texas Proud View Post
Or another example... I have put money into a 401(k)... with my current labor... so, I am not being 'paid' for my labor... but when I take out that money, I pay ordinary income taxes on it.... why is it not cap gain
You get the benefit of contributing into your 401k before taxes and not paying taxes on the distributions each year. With the understanding that you will pay income taxes on withdrawal. you could pay your taxes on you income today and invest in something and only pay cap gains tax when you sell it (if over a year).
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Old 10-22-2012, 04:17 PM   #22
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