I have a large portfolio of stocks that I bought several months ago and I have huge profits on paper. If I sell now, I will have to pay a 28% cap gains tax on it, so I am wondering how long I should hold these stocks in order to qualify for the much lower long term cap gains tax rate. Thanks for your help.
2007-10-04 08:03:52 · 4 answers · asked by Curious_Rascal 2 in Business & Finance ➔ Taxes ➔ United States
If you hold a capital asset for a year and a day, then you qualify for the 15% long-term capital gains rate.
Do you think your portfolio of stocks will go up or down between now and then? If down, do you know how to short stocks to lock in your gain? Hire a stock advisor to help you to hedge your portfolio if needed.
2007-10-04 11:21:07 · answer #1 · answered by William H 5 · 0⤊ 0⤋
Nothing. I agree with you, and point out that was the way it was done* before Reagan Era "reforms". Reagan was 100% correct in saying "Corporations don't pay taxes; People pay taxes." Taxes on dividends are only justifiable in that they level the playing field between sole proprieterships/partnerships and corporations. Taxes assigned to corporations are actually paid variously by the firm's owners, customers, creditors, and employees. Capital gains are either profits made through investment, which ought to be encouraged: or glorified gambling winnings, which may well do more harm than good. Traditionally these have been distinguished by the length of time the investment has been held, but the previous system made a step-change in tax status at 180 days, meaning that what was taxed at one rate at yesterday's closing bell gets taxed at a much lower rate at today's opening bell. A more continual reduction of tax rate over time would be better, and would be easy to implement in the modern environment where everybody has access to reliable software. Such was not the case when Reagan took office, computer time was an expensive thing that not all had access to. I do think that short term capital gains should be taxed the same as gambling gains rather than earned income. But for now these are taxed the same anyway. *pre-Reagan the cutoff between short term and long term capital gains was six months.
2016-05-20 23:56:11 · answer #2 · answered by ? 3 · 0⤊ 0⤋
One year and one day.
2007-10-04 08:08:46 · answer #3 · answered by ninasgramma 7 · 1⤊ 0⤋
1 year and 1 day.
2007-10-04 08:06:50 · answer #4 · answered by Wayne Z 7 · 1⤊ 3⤋