Jul 2, 2008

Capital Gains Tax Rates.....Still Attractive

Capital gains tax rates have really been very attractive since 2001. For example, the maximum capital gains rate is normally 15% unless you are in the 15% income tax bracket. If your tax bracket is 15% or less, the maximum capital gains rate is 5%. For tax year 2008, the 5% rate actually decreases to 0%! This reduced rate will continue through tax year 2010. If you have flexible income, now may be the time to choose to sell appreciated property to take advantage of this very special rate.
As the tax law now stands, after 2010 the capital gains rates are scheduled to return to the 20%/10% rates that were in effect before 2001. Remember also that dividend income will be taxed at ordinary income rates rather than capital gains rates after 2010. So now is the time to for proper planning to achieve the maximum benefit from property sales utilizing these lower rates.

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