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Author: toozie Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121478  
Subject: LT Capital Gains question Date: 11/18/1998 2:10 PM
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Is this correct? --

For the 1998 tax year, one will pay 20% on any holding sold during the 1998 calendar year which was bought 12 months and a day prior to the sale date.

Also, how does a wash sale affect capital gains (vs. capital losses)?

Thanks for any help here.

Randy
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Author: bliles One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6367 of 121478
Subject: Re: LT Capital Gains question Date: 11/18/1998 5:12 PM
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toozie said:

Also, how does a wash sale affect capital gains (vs. capital losses)?

The wash sale rules apply only to capital losses, not to capital gains. If you sell for a gain, you have to report it and pay the taxes regardless of any other buys.

Bob

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Author: toozie Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6368 of 121478
Subject: Re: LT Capital Gains question Date: 11/18/1998 5:27 PM
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Thanks. Do you know if I have the LT capital gains holding period / tax (12 months --> 20%) correct?

Randy

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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6371 of 121478
Subject: Re: LT Capital Gains question Date: 11/18/1998 8:10 PM
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[[For the 1998 tax year, one will pay 20% on any holding sold during the 1998 calendar year which
was bought 12 months and a day prior to the sale date.]]

Randy...

The percentage gain rate that you'll pay on long term capital gains (assets held for more than one year and sold on or after 1-1-98) will depend upon your normal, marginal tax rate. If your normal rate is 28% or greater, your maximum tax on your long term capital gains would be 20%.

But if your marginal tax bracket is 15%, then your tax rate for long term capital gains would be 10%.

So it would certainly be safe to say that, for federal purposes, the maximum tax that you would pay on your qualified long term capital gains would be 20%.

[[ Also, how does a wash sale affect capital gains (vs. capital losses)?]]

The wash sale rules only apply to stocks sold for a loss (as Bob pointed out). If the stock is sold for a gain, then you'll be obligated to pay taxes on that gain, regardless if your turn around and repurchase that stock (or even another stock) immediately before or after the "gain" sale.

We discuss both of these items in various posts in the Taxes FAQ area (archives section). You might want to drift over there and read more. In addition, both of these items are discussed in great detail in The Motley Fool Investment Tax Guide.

TMF Taxes
Roy

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Author: toozie Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6375 of 121478
Subject: Re: LT Capital Gains question Date: 11/18/1998 8:30 PM
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Thanks, TMF Taxes!

Randy

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Author: bliles One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6384 of 121478
Subject: Re: LT Capital Gains question Date: 11/19/1998 1:41 PM
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toozie said:
Do you know if I have the LT capital gains holding period / tax (12 months --> 20%)
correct?


It is 12 months + 1 day. If you buy 3/1/97 and sell 3/1/98 it is a short term gain. If, instead, you sell 3/2/98 it is a long term gain.

Bob

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