Taxpayers will find it prudent to sell capital assets that will result in a capital gains tax at the 15% rate in 2012, versus selling these assets in 2013 and being subjected to the 20% higher capital gains tax rate as being proposed by Obama Administration.

Although, this is not in effect at moment, but according to many tax experts it appears that this may be a reality!

Thus, it would make sense pay capital gains tax on these potential capital gains at a 15% lower rate and perhaps, possibly avoid the 3.8% surtax if the 2013 income would be high enough to trigger it." As always, it would be wise to consult with you tax professional to ensure whether or not this strategy would be suitable for you.

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Ask TaxGuru Please refer to the legal disclaimer.

Hello Friends,

Capital gains are profits from the sale of a capital asset, such as shares of corporate stock, a business, a parcel of land, or a piece of art. Capital gains are generally included in taxable income but are often taxed at a lower rate; under current law, for example, most long-term capital gains face a top rate of 15 percent. Complicated rules impose a range of tax rates on different kinds of gains and can make it difficult for taxpayers to calculate their tax liability. A capital gain occurs when a capital asset is sold or exchanged at a price higher than its basis (its purchase price plus commissions and the cost of improvements net of depreciation). Similarly, a capital loss occurs when an asset is sold for less than its basis. Gains and losses (like other forms of capital income and expense) are all measured in nominal terms-that is, unadjusted for inflation.

Thanks And Regards,
Tony Stevenson