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For the CPA types:

Does this sound right?

As a married joint filer, the 15% bracket ends at $43,850. With 1 child I have a standard deduction of $7,350 and a standard exemption of $8,400. So if I want to maximize the income I report at the lowest possible rate, I want to have an adjustible income of $59,600. Above that my rate goes up.

Now, I can't control at this point the amount of dividends or interest I will earn for the year, we will peg that at $16,600. This means that I have the ability to realize $43,000 of long term gains while only paying the 10% rate on such gains.

Finally, if I have not come up to this amount yet, but have appreciated property (Intel, long term buy and hold) which I do not wish to dispose of, I could sell my stock at the market, realize a gain, and then repurchase. I know you can't generate losses this way, but it seems perfectly ok to generate gains this way.

I thought it was a good idea to max out the 10% tax rate while I could. Due to changing financial conditions, ALL of my capital gains next year will be at the 28% level.

Have I made an obivous mistake with any of this?

Peace



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Does this sound right?

Only if neither you nor your spouse works. If the income detailed in your post is the only income you have in 2000, then your figures and assumptions are correct, and taking the taxable gains in 2000 makes sense to me. Caveat: I didn't verify your figure for the top of the 15% bracket, but it sounds right.

TMF ExRO
Phil Marti
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Yes, neither me nor my wife work this year. (Ok, she got paid a few hundred for driving the school van and I got $50 for doing a software feedback test -- but that is it).

Next year I will work so I can't do it next year.
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