Are you considering securities transactions to save taxes in 2018?

As the year-end approaches, you may be considering securities transactions to save taxes.  While selling and purchasing securities is an investment decision, it is important to know that there could be an impact on your tax liability due to potential capital gains.

How do I determine my tax liability?

To determine your tax liability, you need to learn the tax rates for both short-term and long-term capital gain that are used, which are based on your taxable income. The most common rates are:

Status

Long-Term Rate

If the taxable income is below $77,200 for joint filers ($38,600 for single filers)

0%

If the taxable income is over the 0% threshold and below $479,000 for joint files ($425,800 for single filers

15%

If the taxable income is above the 15% rate

20%

For depreciation recapture on real estate sales

25%

On collectibles

28%

Short-Term Rate

Treated as ordinary income and taxed at your ordinary income tax bracket.

Up to 37%

Are there additional considerations if I have a security to sell?

Yes, there are additional financial considerations that may affect your decision on whether or not to sell your securities. If you would like to learn more about the specifics of security transactions [click here].

When it comes to managing the net investment income tax with capital gain and loss planning, there are many things to keep in mind. Please contact us at 401-831-0200 or contactus@pgco.com if you would like to discuss this topic further, or if we can assistance with your year-end tax planning.