On Thursday, May 13, 2021 at 7:59:09 AM UTC-7, Taxed and Spent wrote:
> On 5/12/2021 4:26 PM, MZB wrote:
> > On 5/12/2021 3:41 PM, JoeTaxpayer wrote:
> >> On 5/12/21 11:49 AM, MZB wrote:
> >>> Suppose I own 500 sh of XYZ with a large (long term) cap. gain, say
> >>> $100K.
> >>> XYZ is going down along with the market. I am forced to hold XYZ as I
> >>> don't want to pay 15%. My thinking is to leave the stock for my
> >>> children so they get the stepped up basis.
It certainly sounds like you may have reasons to want to sell XYZ that are
independent of the tax issues. You may not want to have your investment
decisions driven primarily by tax considerations, particularly if you believe
there is a better investment that will more than make up for the 15% tax rate.
And a 15% tax rate on capital gains is quite low, both in absolute terms and
certainly historically. Figuring out future tax changes is, of course, unknowable
but it seems more likely that the capital gains tax rate will go up rather than
down, given the current historically low rates.
So it may be wiser to decide if you really want to keep XYZ until death or if
it would make more sense to switch to another investment instead. But paying
15% on 100k of gain may be a better wealth-building move than paying 0% on 50k
of gain if you believe that the stock price will be heading lower than other