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Financial Planning / Tax Strategies
|Subject: Re: Year-end and 0% Capital Gains, Basic Questio||Date: 12/24/2013 3:11 PM|
|Author: aj485||Number: 119756 of 122105|
Hypotheticals for single unemployed 30-yo US taxpayer, 2013:
earned income: $0
1099-DIV/INT income: $11,250
If there were any unemployment benefits received, there would likely also be income from a 1099-G that needs to be accounted for.
(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;
If the taxpayer has a traditional IRA, converting some/all of it to a Roth IRA may actually be a better way to use the tax benefit, since long term capital gains are (currently) taxed at lower rates than the ordinary income rates that IRA conversions are taxed at.
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