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LTCG 2016 vs. 2017?
Old 12-21-2016, 05:44 PM   #1
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LTCG 2016 vs. 2017?

Is anyone trying to decide whether to sell their winners if you are able to do so in the 15% tax bracket so your LTCG are taxed at 0%? There are rumors it will be 6 - 10% next year. Because where is no wash sale applied to gains you can buy them back a day or two later. I can't decide if it is worth it, anyone else have these thoughts?
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Old 12-21-2016, 06:02 PM   #2
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Equity markets are inherently volatile. You are not certain to have gains available to sell if you wait. Thus, if you need the cash (or plan to transition out of the particular investments), it would seemingly be risky to wait--unless the magnitude of gains is such as to overwhelm the risk and the relatively minor tax savings.
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Old 12-21-2016, 06:43 PM   #3
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Assuming this assumption is valid... yes, it may make sense. you can sell and buy the same day.
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Old 12-21-2016, 07:25 PM   #4
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Quote:
Originally Posted by bingybear View Post
Assuming this assumption is valid... yes, it may make sense. you can sell and buy the same day.

Thanks bear. I can take the market differential for a day in order to save taxes on 30K.
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Old 12-21-2016, 07:26 PM   #5
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Originally Posted by 2017ish View Post
Equity markets are inherently volatile. You are not certain to have gains available to sell if you wait. Thus, if you need the cash (or plan to transition out of the particular investments), it would seemingly be risky to wait--unless the magnitude of gains is such as to overwhelm the risk and the relatively minor tax savings.
Thanks for the input 2017ish!
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Old 12-21-2016, 07:43 PM   #6
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I have done this in the past to wash off as much capital gain whenever I could, even when the tax laws did not change. If you let the cap gain accumulates, eventually when you need to sell it, the gain may be too much and you have to pay taxes. You cannot "save" the unused tax-free cap gain for later years, so use it all up each year.

I was able to do it only after I stopped work, to be in a sweet spot in the tax bracket. When I start to draw IRA/401k and get SS, will not be able to do this anymore, so the window is small.

I sold and bought back immediately in a matter of seconds. I have enough at my brokerage to get 100 free trades each month, so it does not even cost a dime. That's for stocks and ETFs though. MFs still have some transaction fees, plus cannot be bought and sold like stock day trading.
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Old 12-21-2016, 07:57 PM   #7
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Perhaps this is one reason why tax-loss harvesting is so important. I have carryover losses that will offset any gains realized for many years to come, so I won't be paying any taxes for a while. At last I have that in common with the president-elect.
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Old 12-21-2016, 08:07 PM   #8
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I wish I could say that I will pay no tax.

In the 2009 fiasco, I got plenty of losses carried-over after the stingy $3K deduction off earned income. I subsequently used that all up with later cap gains.

Then, I started to wash off more gains when my earned income got to 0 after I completely stopped work, and my total income was low enough to have headroom for 0% cap gain tax.

At this point, I still have some taxable cap gains left. I will see if I can wash off some more.
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