Long Term Capital Gains Taxes
A client just asked me to check into her liability for Capital Gains Taxes, if she were to sell a business she has had for twenty years. It seems that this is becoming an issue for people thinking of retiring because of the way the Country may need to alter its thinking on taxes, due to the current economic crisis. (I am not passing judgement on any issue; this is simply a matter of recognizing what is occuring in the market.)
I am not an accountant and told her she needs to discuss this with her CPA, but I have looked into the issue, in brief. Currently, Tax liablity on a Long term Gain would be a maximum of 15%, depending upon your overall tax bracket. But in 2011, it will go up to 20%. This means that, if you are thinking of selling a business or real estate investment, you could end up paying 33% more more in taxes, if you delay the sale until then.
Why worry? Because in the era of difficult lending situations, it can now take more than a year to sell a business or an investment property. 2011 sounds far off, but it really is not, in the current situation. And frankly, the current Congress could act to increase Capital Gains Taxes well before the 2011 timeframe comes about.
So, if you are looking to retire or sell off an investment, think about it and try to make decisions - regardless of which way you go - with the information regarding Capital Gains Taxation in mind.
Those of you in the accounting or tax biz, please comment!
I am not an accountant and told her she needs to discuss this with her CPA, but I have looked into the issue, in brief. Currently, Tax liablity on a Long term Gain would be a maximum of 15%, depending upon your overall tax bracket. But in 2011, it will go up to 20%. This means that, if you are thinking of selling a business or real estate investment, you could end up paying 33% more more in taxes, if you delay the sale until then.
Why worry? Because in the era of difficult lending situations, it can now take more than a year to sell a business or an investment property. 2011 sounds far off, but it really is not, in the current situation. And frankly, the current Congress could act to increase Capital Gains Taxes well before the 2011 timeframe comes about.
So, if you are looking to retire or sell off an investment, think about it and try to make decisions - regardless of which way you go - with the information regarding Capital Gains Taxation in mind.
Those of you in the accounting or tax biz, please comment!
