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Wendy Reed
Wendy Reed, Enrolled Agent
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I am a single widower (77), retired no dependents with about

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I am a single widower (77), retired no dependents with about $75,000.00 annual income.
Thinking of selling at least part of a mutual fund position value around $100,000.00 now, to take advantage of assuming lower cap. gain rate in 2010 then what it will/may be in 2011.
It is a growth fund so doesn't throw off much income. Bought for about $45,000.00 in 1994.
Have not calculated dividends or other income from it yet. Has earned about 6% a year average since purchase. Don't want to see recent gains go back to the market(down) like 2000, or 2008. What do you think cap gain rate will be for me next year?...
Thanks
Paul
Submitted: 4 years ago.
Category: Tax
Expert:  Wendy Reed replied 4 years ago.

Thank you for giving me the opportunity to assist you. I will give the best answer that I can with the information provided.

 

You are wise to consider this. Under the current rule, as you know long term cap. gain is taxed at a maximum of 15%. This rate is set to expire at the end of 2010, and right now---2011 rates should be 10-20%. Based on your income, you would be looking at 20%.

 

Congress still has time to act, and I personally feel that in this economic climate, Congress will keep the 15% maximum.

 

You most likely will have until Dec. 31 to execute any trade if you want to wait until Congress meets and clarifies 2011 tax law.

 

Here are some relevant articles:

 

http://moneywatch.bnet.com/retirement-planning/blog/retirement-roadmap/capital-gains-taxes-may-rise-should-you-act-now/3420/

 

 

http://www.bankrate.com/finance/money-guides/no-taxes-due-for-some-investors-1.aspx

 

 

http://www.uschambersmallbusinessnation.com/article/economic-political-climate-make-tax-planning-hard

 

Wendy Reed, Enrolled Agent
Category: Tax
Satisfied Customers: 3346
Experience: 15+ years tax preparation and tax advice.
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Wendy Reed
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15+ years tax preparation and tax advice.