One assumption is that you have, apart from the loss-harvesting trade, a long-term capital gain this year.
However, since VC partnerships mostly make long-term equity investments, most of their profit is long-term capital gain.
Stocks and index funds, which benefit from much lower long-term capital gain rates, can go in your taxable accounts.
The long-term capital gain, however, would be taxed at a low rate, a little more than half your ordinary income rate.
If the property has been held for more than one year, gains are taxed at favorable long-term capital gain tax rates.
If the stock sale is a qualifying transaction, then the employee will only report a short or long-term capital gain on the sale.
The NUA is not taxed until the shares are sold, and when the shares are sold, you only pay tax at long-term capital gain rates.
Since you've held both lots for more than a year, any profit is a long-term capital gain, taxed at a current top rate of 15%.
Do this and you get favorable long-term capital gain treatment.
One of the reasons that I like to do it at one year is that if you are selling something at a gain then it's a long-term capital gain.
These particular options have the tax advantage that, for long-term investors, the paper gain on exercise is not recognized until the stock is sold and it is then taxed at long-term capital gain rates.
This offered only a 1% benefit over the long-term capital gain rate of 15%, and coupled with the fact that 7% of the gain was also treated as an AMT preference item, made Section 1202 a rather useless provision.
When any or all of the employer stock is sold, Bill will pay long-term capital gain rates, currently only 15%, on the NUA attributable to that stock, regardless of how long (or short) the stock was held after it was distributed from the plan.
That's true even if you sell the shares the day after the distribution from your plan, since the rule requiring you to hold the stock more than one year to qualify for long-term capital gain rates does not apply to NUA stock withdrawn as part of an LSD.
Premiums pocketed from expired options are considered short-term capital gain (never mind how long you hold the position), and that gain could be taxed at high rates.
Sixty percent of their gain will be taxed at the 15% long-term capital gains rates.
If stocks go nowhere, you make 2% a year owning futures, taxed as a capital gain (a blend of short- and long-term gains).
We will eliminate the tax on qualified dividends and long-term capital gains to free up the billions of dollars Americans are sitting on to avoid taxes on the gain.
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