Tax reform proposals are still in the negotiation stage and may never become law, but investors should be aware that proposed measures in the Senate draft could be harmful to their financial health.
At present, in managing your portfolio, we have the ability to select and sell investment shares in a way that allows us to MINIMIZE your capital gains tax bill.
The Senate proposal, as written, will force us to sell shares in a way that MAXIMIZES your tax bill (and directs maximum tax dollars to the U.S. Treasury), by directing us to sell your oldest shares first (FIFO method).
Here’s the takeaway:
If there are shares of stock you definitely want to sell soon, consider selling before year-end so you can choose the specific shares you want to sell and minimize taxes due. If you wait until next year, you may not have the choice of which shares to sell, and the tax bill could mount.
Really unhappy? Contact your elected officials ASAP to protest the measure and others friendly to Treasury but hostile to investors.