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This year is going to be a huge capital gains year for me for obvious reasons. But still would like to be educated on tax law so I can be efficient as possible. Are there any tax courses or sites available that can help me be educated on tax laws and what I can write off and such? Thanks!

Gerald
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This year is going to be a huge capital gains year for me for obvious reasons.

No, actually, it's actually not obvious. Did you sell a lot of your holdings? Were the holdings you sold held in taxable account? And had you held them longer than a year?

If you didn't sell anything, then you don't have to pay taxes on capital gains.

If what you sold wasn't held in a taxable account, then you aren't going to be paying capital gains taxes. If the holdings you sold were in a Traditional IRA, then you don't pay any taxes until you take a withdrawal. And then, the taxes paid are ordinary income taxes (and possibly penalties), not capital gains taxes. If the holdings you sold were in a Roth IRA, again, until you make a withdrawal, you wouldn't be subject to any taxes or penalties. And with a Roth IRA, there are very few times when even a withdrawal will trigger taxes or penalties, unless you've withdrawn more than you have contributed.

If you had held each position that you sold for less than a year, your gains will be taxed at ordinary income rates, rather than capital gains rates.

But still would like to be educated on tax law so I can be efficient as possible. Are there any tax courses or sites available that can help me be educated on tax laws and what I can write off and such?

Well, there isn't much that you can write off any longer, since the TCJA eliminated miscellaneous deductions, limited State And Local Tax (SALT) deductions to $10k, and significantly increased the standard deduction. Between fewer deductions and an increased threshold, many fewer people itemized than used to.

That said, I would suggest that you look into being a VITA or TaxAide/TCE volunteer https://www.irs.gov/individuals/choose-your-tax-volunteer-ro... You can learn about taxes and help some people out while doing so.

AJ
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The IRS site?

nag
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If you didn't sell anything, then you don't have to pay taxes on capital gains.

We have some long held mutual funds that spin off capital gains to manipulate their holdings. If we hadn't held it for so long, and be subject to huge capital gains if we sold, we would sell it. Sometimes tens of thousand a year in capital gains for one fund.

It's not always about what you hold, it can be what and where you hold it.

IP
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If we hadn't held it for so long, and be subject to huge capital gains if we sold, we would sell it. Sometimes tens of thousand a year in capital gains for one fund.

So, if you sold it, you would be subject to even higher capital gains taxes than if you keep holding it? That's kind of my point to the OP - if he didn't sell anything, his capital gains are not as likely to be 'huge'. That said, the OP seems to be a follower of Saul's board and a MF subscriber, so I suspect that there are more individual stocks in the portfolio than mutual funds, and that's the perspective that I was using. With individual stocks, you generally do have to sell something to initiate capital gains taxes.

AJ
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That's kind of my point to the OP - if he didn't sell anything, his capital gains are not as likely to be 'huge'.

Not as likely does not equal not at all. We've had a number of years of large capital gains without sales. Got much better when we minimized mutual funds, but very possible to have large CGs without sales if the OP has mutual funds.

IP
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With individual stocks, you generally do have to sell something to initiate capital gains taxes.

Forced buyouts can generate large capital gains without action from the stock holders.
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And all of these embellishments make the OP's original statement of This year is going to be a huge capital gains year for me for obvious reasons. even less obvious.

AJ
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Having observed AJ's excellent(and sometimes more than direct) replies over the years, she normally can only give correct answers if one offers actual specifics.

I will also be in a situation whereby large capital gains will be involved. Mine though are purely to selling out certain stocks in March which I have held for many years. One in particular that the CG's amounts to 6 figures alone, albeit buying back into the same stock 2-3 weeks later, plus stupidly forgetting the wash sale rules and thereby paying more per share(but that's another story). Now I read a few times that for very long term CG's there is a way of paying zero taxes, or hiring a certain Politician's Accountant(:-))). Taxes are taxes and what will be will be as we all have to bank it sometime(just normally not all in one go and in the same year!)

Don't think I would qualify for zero taxes on my long tern holding of stocks but would love to know how others(appear to) manage to do it?

AJ and Peter et al, any words of wisdom on accounting creativity?...:-)incoming missiles welcomed.

Cheers. Bran.
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ooh I forgot to mention the most important thing as will get slapped. Stocks referring to held in a taxable account only!!
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One in particular that the CG's amounts to 6 figures alone, albeit buying back into the same stock 2-3 weeks later, plus stupidly forgetting the wash sale rules and thereby paying more per share(but that's another story).

This statement is confusing. A sale at a profit does not trigger a wash sale even if bought back minutes later.
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Thx will look into that as wondered at the time. Never fully understood the rules.
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Mine though are purely to selling out certain stocks in March which I have held for many years. One in particular that the CG's amounts to 6 figures alone, albeit buying back into the same stock 2-3 weeks later, plus stupidly forgetting the wash sale rules and thereby paying more per share(but that's another story).

As vkg indicated, if you have gains, there isn't a wash sale. A wash sale requires 2 things:
- that you have a capital loss by selling a security, and
- that you purchased a substantially identical security within 30 days before or after the loss was incurred

Now I read a few times that for very long term CG's there is a way of paying zero taxes

The only way to pay no tax on long term capital gains is to keep your taxable ordinary income (including short term capital gains) plus your long term capital gain income in the 0% capital gains bracket:

Single or Married Filing Separately - $40,000
Head of Household - $53,600
Married Filing Jointly - $80,000

You can reduce your income by using things like allowable deductions, net operating losses from a business, depreciation of income property, etc.

AJ
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You can reduce your income by using things like allowable deductions, net operating losses from a business, depreciation of income property, etc.

AJ


Including selling (without creating a wash sale) stocks, mutual funds, ETFs, etc... which have losses.
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Have you paid estimated taxes or withholding to reach a safe harbor for underwithholding penalty for your state and federal?
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Yes I did, but estimated based on what I thought they might be, not what they are likely to be....

Thx for the responses and thx AJ.
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Or just do like me, give up on the constantly changing tax laws and just hire a CPA to do them. About $400 for a return the size of a short novel and worth every penny. I’d stress about every single alphabet schedule....not an easy return.

Since it’s a “big” year $400 isn’t bad. About twice the cost of Turbo Tax Business. Still takes me 5-6 hours just to pull paperwork together.

The year I got a scary letter from the IRS claiming I owed $15,000 and she said “I’ll handle it”, buried them in paperwork and they backed off....Turbo won’t do that for you.

Worth it.
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If taxable income is under 40K this year, is there a limit to how much capital gains I can take ?
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If taxable income is under 40K this year, is there a limit to how much capital gains I can take ?

Presumably, the 'limit' you're referring to is that you're trying to stay in the 0% capital gains bracket for long term capital gains as a single filer? Then that limit is actually $40,400 in total taxable income (long-term capital gains plus ordinary income). After you account for a standard deduction of $12,400, that means that your capital gains plus your ordinary income could be as much as $52,800 before you would pay any taxes on long term capital gains.

AJ
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