Hi, just asking for an opinion. I read that one of the possibilities after the election is that long term gains will be taxed as short term gains. If that is true, what is your plan to protect your TSLA gains? Sell everything while it is taxed as long term and then buy back? If that's the case, will everyone be selling and the market will crash?
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If Long Term Gains ->Short Term Gains after election what's your plan?
- Thread starter Sanny
- Start date
Sell long term shares now to assure the lower tax rate. I've always done this. Not to avoid future changing of tax laws but just to spread out the tax consequence and I was always confident I'd be able to buy back in at a lower price.
I'm not sure what I'll do this year since the gains are much bigger than years past and we're no longer range bound. There's a bigger risk of it getting away.
I'm not sure what I'll do this year since the gains are much bigger than years past and we're no longer range bound. There's a bigger risk of it getting away.
I'm imposed under French laws but I have the same concerns.
With Covid 19, it's likely that the rich will taxed to contribute. Macron killed the wealth tax on financial assets (ISF) and introduced a 30% flat-tax on all capital gains/revenues (PFU), so billionaires' wealth has risen much more than in the US. People will realize that sooner or later and demand some tax hike. Also, any US policy change should influence on the other side of the Atlantic because the politicians keep arguing that they cannot raise taxes because the rich would flee to the US (or some tax heavens where people don't really intend to move, IMO).
Anyway, I've bought ~5,000 shares since 2012 at an average post-split price of ~$50, sold them all at $100 in mid-March and bought them back at $90.
My taxes on realized gains amounts to $75K assuming the flat tax will apply (they'll be due in end of Q3 2021). At today's prices, I have 1.85M of unrealized gains, which would cost at least $555K in tax.
I'm not sure when the tax rate becomes definitive, so I don't know if selling everything again would secure the 30% rate on all gains ($2M incl. unrealized). My understanding is that I'd benefit from this only I can buy them back at X% below the selling price (where X is the difference btw the current and future tax rate).
I intend to hold the shares for the long term, so maybe I shouldn't touch them (whatever the changes in taxation) because one can't preclude the possibility that Tesla will pay dividend in a decade or more, at which point I'd finally profit on the shares not sold (to pay taxes).
Does that make sense?
With Covid 19, it's likely that the rich will taxed to contribute. Macron killed the wealth tax on financial assets (ISF) and introduced a 30% flat-tax on all capital gains/revenues (PFU), so billionaires' wealth has risen much more than in the US. People will realize that sooner or later and demand some tax hike. Also, any US policy change should influence on the other side of the Atlantic because the politicians keep arguing that they cannot raise taxes because the rich would flee to the US (or some tax heavens where people don't really intend to move, IMO).
Anyway, I've bought ~5,000 shares since 2012 at an average post-split price of ~$50, sold them all at $100 in mid-March and bought them back at $90.
My taxes on realized gains amounts to $75K assuming the flat tax will apply (they'll be due in end of Q3 2021). At today's prices, I have 1.85M of unrealized gains, which would cost at least $555K in tax.
I'm not sure when the tax rate becomes definitive, so I don't know if selling everything again would secure the 30% rate on all gains ($2M incl. unrealized). My understanding is that I'd benefit from this only I can buy them back at X% below the selling price (where X is the difference btw the current and future tax rate).
I intend to hold the shares for the long term, so maybe I shouldn't touch them (whatever the changes in taxation) because one can't preclude the possibility that Tesla will pay dividend in a decade or more, at which point I'd finally profit on the shares not sold (to pay taxes).
Does that make sense?
1) use critical thinking to evaluate whether what you’ve ‘heard’ is realistic.
2) never let hypothetical tax decisions drive investment decisions. Value of the stock has more impact on your net gains/losses vs taxes.
Point #1 does seem realistic and point #2 does not help if one hesitates between holding and doing a quick sell-buyback transaction (especially in a bear environment).
I highly doubt his tax plan goes through both houses and gets approved. Even if it does, I suspect it'd take effect for 2022 at the earliest, so you'd still have an oppertunity to sell next year based on the current tax laws. It would be impossible to make it retroactive for the year if it's passed halfway into 2021.
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