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Subject:  Re: tax-free dividends? Date:  10/21/2012  9:26 PM
Author:  TMFPMarti Number:  116825 of 129421

Now -- I just remembered -- wasn't there something a few years ago where people could take their long term stocks and do a pretend sale of them (a deemed sale, I think it was called), and then they could hold the stock even longer for some extra long holding period. Was that 5 years? Whatever happened to that?


The "Bush Tax Cuts" came along and temporarily (for 10+ years) replaced it. But guess what? That "super" long-term category (holding period greater than 5 years) was back when tax law changes didn't sunset, and it was never repealed. So, unless the law changes before then, that category is back as of 1/1/2013. Anyone who did that "deemed" sale back when will have satisfied the 5 year holding period and then some. I don't remember the rates, but IIRC it's a couple of percentage points lower than the ordinary LTCG rate.

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