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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 127519

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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