All articles tagged with #capital gains
The article discusses six tax provisions extended or introduced under the 'Beautiful Bill' that primarily benefit high-income and wealthy Americans, including permanent tax rate reductions, expanded deductions, higher estate and gift tax exemptions, and increased capital gains exclusions, favoring the affluent over middle-income households.
President Trump's 'One Big Beautiful Bill' Act introduces tax changes that benefit startup founders and investors by reducing capital gains taxes, expanding small business eligibility, and encouraging earlier exits and acquisitions, potentially boosting capital flow and innovation.
Financial advisors suggest that donating appreciated stock to charity can be a more tax-effective strategy than cash donations, as it avoids capital gains taxes and allows for a deduction of the stock's market value. With the higher standard deduction, fewer taxpayers itemize, but strategies like "stacking deductions" or using donor-advised funds can help maximize tax benefits from charitable giving.
Jeff Bezos is set to save over $600 million in taxes by making Miami his primary residence, allowing him to avoid state income and capital gains taxes. His move from Seattle to Miami comes with significant tax advantages, with the potential to save him $140 million in capital gains taxes on a recent stock sale and an estimated $610 million by 2025. The move to Florida also exempts him from estate taxes, potentially saving him billions in the long run. Bezos has made high-profile real estate purchases in Miami, including a $79 million mansion and a $68 million property, and is expected to build a megamansion on the exclusive island Indian Creek.
Investors who put money into money market mutual funds in 2023 may face higher tax bills in April due to the funds' high yields. With over $5.84 trillion invested in these funds, many individuals and institutions are earning significant dividends, but these earnings will be subject to regular income taxes rather than the more favorable capital gains rates. For example, a California investor with a 45% tax rate could owe $2,250 in taxes on $100,000 earned from a money market fund with a 5% yield. However, some states may offer tax breaks depending on the underlying assets of the funds.
Holding stock mutual funds in taxable accounts can lead to unwanted distributions and tax liabilities. The JP Morgan Tax Aware Equity Fund is an example of a fund that will distribute capital gains before the year ends, resulting in a tax burden for investors. To avoid such situations, investors should consider locating investments wisely, exiting weak funds, researching a fund's tax cost ratio, considering "tax aware" funds with low expenses, harvesting losses, and preferring ETFs in taxable accounts. These strategies can help minimize tax trouble and maximize investment returns.
Crypto investors who fall into the 0% long-term capital gains bracket may have an opportunity to owe zero taxes on their cryptocurrency gains in 2023. This strategy, known as "tax gain harvesting," involves strategically selling profitable crypto held in brokerage accounts and immediately repurchasing it. By doing so, investors can recognize the gain without incurring any tax liability. This approach is considered a wiser strategy than tax loss harvesting, which only defers future tax payments. To qualify for the 0% long-term capital gains rate, individuals must have taxable income of $44,625 or less for single filers and $89,250 or less for married couples filing jointly in 2023.
Amazon founder Jeff Bezos is moving from Washington state to Florida, and while he has cited reasons such as his love for Miami and being closer to his parents, he has not mentioned the significant tax benefits of the move. By relocating to Florida, Bezos can avoid Washington's 7% tax on capital gains and the estate tax, potentially saving his estate an estimated $32 billion. While it is not uncommon for wealthy individuals to change states for tax purposes, the author suggests that Bezos should be more transparent about the role taxes played in his decision.
A couple who purchased a lakeside home for $700,000 in 2012, which is now worth over $1.2 million, is considering selling to avoid capital gains taxes. The couple has reached the $500,000 married-couple limit for the exclusion of capital gains. While the husband wants to sell and restart the exclusion on a new home, the wife is determined to stay. The husband is concerned that if they stay and eventually need to sell due to declining health, they could face a large tax bill if home prices continue to rise. The advice given is to weigh the pros and cons of staying in the home from a lifestyle perspective and consider factors such as proximity to medical facilities. From a financial standpoint, selling may save on capital gains tax in the long run, but there are also costs associated with moving. Ultimately, the decision should consider both financial and personal preferences.
Japan's National Tax Agency has clarified that crypto issuers in the country will not have to pay capital gains taxes on unrealized gains. The ruling Liberal Democratic Party tax committee approved a proposal to exempt crypto startups that issue their own tokens from paying corporate taxes on unrealized gains last December. The tax exemption will also apply to unrealized gains from holding applicable cryptocurrency continuously from the date of issuance or from taking certain technical measures to prevent its transfer to other persons.