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Financial Planning / Tax Strategies


Subject:  Re: Year-end and 0% Capital Gains, Basic Questio Date:  12/24/2013  1:49 PM
Author:  ptheland Number:  119755 of 127616

My apologies if this is well-trodden territory, and for the extremely basic nature. Just want to make sure I'm fully understanding this.

Yep, it's well trodden. But that's handy as we just have to keep in the ruts in the road.

(1) If I'm understanding the 0% scenario correctly, this person should absolutely try to harvest $25,000 in long-term capital gains (the $36,250 limit - $11,250 above). From a Federal taxation perspective anyway; let's ignore state-specific issues.

Yep. That would be effectively tax-free gains. And yes, most states would have some tax on this hypothetical, so that's also a consideration.

(2) Is the $6,100 standard deduction in any way advantageous?

Yes, the standard deduction would reduce taxable income, allowing more LTCG at 0%.

(3) Is there a wash rule application to watch out for here?

Nope. No wash rules for gains, only losses.

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