Capital Gains Question

[Trawler]

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.

 

[karluk]

In a word, "no". The wash rule applies only to losses, not capital gains.

 

[Rustward]

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.

 

[Trawler]

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.

 

[ChiliPepr]

"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.

 

[Trawler]

"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.

 

[kaneohe]

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.

 

[Trawler]

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 .

 

[Animorph]

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.

 

[Trawler]

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.