{"id":4740,"date":"2019-09-25T00:00:00","date_gmt":"2019-09-25T04:00:00","guid":{"rendered":"https:\/\/www.whitcomb.com\/consider-the-tax-before-you-sell\/"},"modified":"2022-02-07T11:47:39","modified_gmt":"2022-02-07T15:47:39","slug":"consider-the-tax-before-you-sell","status":"publish","type":"post","link":"https:\/\/www.whitcomb.com\/blog\/2019\/09\/25\/consider-the-tax-before-you-sell\/","title":{"rendered":"Consider the Tax BEFORE You Sell"},"content":{"rendered":"\n
Multiple tax rates hold the key<\/strong><\/p>\n\n\n\n In times of market volatility or when a financial need arises, it is only natural to consider selling some investments. Understanding the tax consequences is key to making an informed and planned decision. Here is what you need to know BEFORE you sell:<\/p>\n\n\n\n Investment Tax Rates<\/strong><\/p>\n\n\n\n * a 3.8% net investment income tax may also apply to these earnings.<\/p>\n\n\n\n As the above tax rate chart suggests, understanding the tax consequence of selling an investment can be complicated. Your tax obligation could be subject to no tax or up to 37 percent plus an additional 3.8 percent for the net investment income tax. Here are some ideas to consider:<\/p>\n\n\n\n Within retirement accounts<\/strong><\/p>\n\n\n\n Gains and losses outside of retirement accounts<\/strong><\/p>\n\n\n\n Remember your investment decisions can often have quite different tax consequences. The best suggestion is to seek advice BEFORE you sell.<\/p>\n","protected":false},"excerpt":{"rendered":" In times of market volatility or when a financial need arises, it is only natural to consider selling some investments. Understanding the tax consequences is key to making an informed and planned decision. Here is what you need to know BEFORE you sell.<\/p>\n","protected":false},"author":18,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"post_statement":"","post_description":"","post_cta":"","post_button":"Read More","post_button_url":"","compliance_id":"","post_disclaimer":"","footnotes":""},"categories":[46],"tags":[35],"acf":[],"_links":{"self":[{"href":"https:\/\/www.whitcomb.com\/wp-json\/wp\/v2\/posts\/4740"}],"collection":[{"href":"https:\/\/www.whitcomb.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.whitcomb.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.whitcomb.com\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/www.whitcomb.com\/wp-json\/wp\/v2\/comments?post=4740"}],"version-history":[{"count":1,"href":"https:\/\/www.whitcomb.com\/wp-json\/wp\/v2\/posts\/4740\/revisions"}],"predecessor-version":[{"id":5216,"href":"https:\/\/www.whitcomb.com\/wp-json\/wp\/v2\/posts\/4740\/revisions\/5216"}],"wp:attachment":[{"href":"https:\/\/www.whitcomb.com\/wp-json\/wp\/v2\/media?parent=4740"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.whitcomb.com\/wp-json\/wp\/v2\/categories?post=4740"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.whitcomb.com\/wp-json\/wp\/v2\/tags?post=4740"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Investment<\/td> Tax Classification<\/td> Holding Period<\/td> Tax Rate<\/td> Comments<\/td><\/tr> Retirement Accounts: 401(k), 403(b), traditional IRA, SEP IRA, SIMPLE IRA<\/td> Ordinary income (when funds are withdrawn from the account)<\/td> Determined by the account type (usually withdrawals after age 59 1\/2)<\/td> 0% up to 37%*<\/td> There is not a tax event when an investment is sold within your account. The tax rate depends on your annual income at time of fund withdrawal<\/td><\/tr> Retirement Accounts: Roth IRA and Roth 401(k)<\/td> No tax on withdrawals<\/td> 5 years and 59 1\/2 years old or older<\/td> N\/A<\/td> Earnings are not taxed as long as rules are followed<\/td><\/tr> Short Term Capital Gains (STCG)<\/td> Ordinary income<\/td> 1 year or less<\/td> 0% up to 37%*<\/td> For investment sales such as stocks and bonds<\/td><\/tr> Long-term Capital Gains (LTCG)<\/td> LTCG rates<\/td> More than 1 year<\/td> 0% up to 20%<\/td> For investment sales such as stocks and bonds<\/td><\/tr> Depreciation Recapture<\/td> Special<\/td> Any<\/td> 25%<\/td> When you sell property that has been depreciated in prior years, part of your sale price may be taxed as a recapture of this prior period depreciation<\/td><\/tr> Collectables<\/td> Special<\/td> Any<\/td> 28%<\/td> A special tax rate applies to gains on the sale of items you collect (like coins and baseball cards)<\/td><\/tr> Investment losses<\/td> Ordinary income<\/td> Any<\/td> Offset benefit: 0% up to 37%<\/td> Losses can offset ordinary income up to $3,000 each year<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n