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Is the federal govt. going to offer tax breaks for holding stocks for 18months? What was decided on that?

Also, what are the income limits for various tax brackets and what are the percentages.

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flitt writes (in part):

Is the federal govt. going to offer tax breaks for holding stocks for 18months? What was decided on that?

I reply:

The holding period necessary to claim long term capital gains treatment has been reduced from 18 months (and a day) to 12 months (and a day), retroactive to sales on or after January 1, 1998. You might want to search the Tax Strategies board for posts by TMFTaxes. He's very responsive (not that the posters here aren't!) and most of his posts contain links to very useful sites both within and without the Fool. Good luck! --Bob
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Flitt asks:

Is the federal govt. going to offer tax breaks for holding stocks for 18months? What was decided on that?

Also, what are the income limits for various tax brackets and what are the percentages.


As part of the IRS Restructuring bill, Congress reduced the holding period for long term capital gains rates to 18 months and a day. If you are in a 15% marginal tax bracket, that means your long term capital gains rate will be 10%. For those in a marginal tax bracket of 28% or higher, the rate is 20%.

If your taxable income in 1998 as a single person is in the ranges shown, then your marginal income tax bracket is as indicated:

0 to 25,350………….15%
25,350+ to 61,400…..28%
61,400+ to 128,100…31%
128,100+ to 278,450..36%
278,450+………….39.6%

For joint filers, the numbers are:

0 to 42,350…………..15%
42,350+ to 102,300….28%
102,300+ to 155,950...31%
155,950+ to 278,450...36%
278,450+…………..39.6%

Regards….Pixy

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Pixy said, in part:

<<As part of the IRS Restructuring bill, Congress reduced the holding period for long term capital gains rates to 18 months and a day. >>

Are you sure that you didn't mean 12 months & a day?
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DownwardSpiral caught Pixy when he said:

Pixy said, in part:

<<As part of the IRS Restructuring bill, Congress reduced the holding period for long term capital gains rates to 18 months and a day. >>

Are you sure that you didn't mean 12 months & a day?


And a great catch it was! Yes, I did mean 12 months and a day.

Obviously, my brain was disengaged from my fingers when I typed that bone-headed error. I'm glad you found it and are keeping me straight. Lord knows, someone has to before I run amok. :-)

Regards....Pixy
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<< You might want to search the Tax Strategies board for posts by TMFTaxes. He's very responsive (not that the posters here aren't!) and most of his posts contain links to very useful sites both within and without the Fool. Good luck! --Bob>>

Or just repost the same question on the tax board as you did 53 minutes after the original post on this board....no point in waiting around.
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Pixy says:
>As part of the IRS Restructuring bill, Congress reduced the holding period for long term capital gains rates to 18 months and a day<

Isn't this 12 months and a day?

>If your taxable income in 1998 as a single person is in the ranges shown, then your marginal income tax bracket is as indicated:<

What is usually missed in the discussion of Long Term Capital Gains rates is that the IRS uses a very complicated work sheet to determine your taxes.

The result of this work sheet is that your marginal income tax bracket is determined by adding your capital gain to your other income. So if your normal taxable income plus your capital gain income puts you in the 28% bracket, you will effectively pay 20% capital gains.

You actually pay 28 % on a reduced dollar amount.

Is this clear as mud? I think that's the way our politicians wanted it.

Paul
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