Taxes and IAU

[rhymenocerous]

Under current tax law, you pay 0% on LTCGs if you are in the 15% bracket.  I believe that this is changing in 2013 to 10%, so it makes sense for anyone in the 15% bracket to sell any LTCGs before the end of the year to reset their basis.

Is it correct that the 0% LTCG rate does not apply to IAU?  If my understanding is correct, you pay the lower of your marginal rate or 28%, which in this case would be 15%.

On the other hand, if one owned GTU, would the 0% LTCG rate then apply?

[steve]

Under current tax law, you pay 0% on LTCGs if you are in the 15% bracket.  I believe that this is changing in 2013 to 10%, so it makes sense for anyone in the 15% bracket to sell any LTCGs before the end of the year to reset their basis.

Is it correct that the 0% LTCG rate does not apply to IAU?  If my understanding is correct, you pay the lower of your marginal rate or 28%, which in this case would be 15%.

On the other hand, if one owned GTU, would the 0% LTCG rate then apply?

As far as I know you can take a tax gain harvest with GTU if it is a long term capital gain.

[rhymenocerous]

Under current tax law, you pay 0% on LTCGs if you are in the 15% bracket.  I believe that this is changing in 2013 to 10%, so it makes sense for anyone in the 15% bracket to sell any LTCGs before the end of the year to reset their basis.

Is it correct that the 0% LTCG rate does not apply to IAU?  If my understanding is correct, you pay the lower of your marginal rate or 28%, which in this case would be 15%.

On the other hand, if one owned GTU, would the 0% LTCG rate then apply?

As far as I know you can take a tax gain harvest with GTU if it is a long term capital gain.

Can you explain this a bit more?

[dualstow]

Under current tax law, you pay 0% on { Long Term Capital Gains } if you are in the 15% bracket.

I didn't even know this as I'm regularly in the 25% bracket. I seem to be just over the line. Maybe I should lower my income a tad!

[steve]

Under current tax law, you pay 0% on LTCGs if you are in the 15% bracket.  I believe that this is changing in 2013 to 10%, so it makes sense for anyone in the 15% bracket to sell any LTCGs before the end of the year to reset their basis.

Is it correct that the 0% LTCG rate does not apply to IAU?  If my understanding is correct, you pay the lower of your marginal rate or 28%, which in this case would be 15%.

On the other hand, if one owned GTU, would the 0% LTCG rate then apply?

As far as I know you can take a tax gain harvest with GTU if it is a long term capital gain.

Can you explain this a bit more?

http://www.morningstar.com/cover/videoc ... ?id=326710
http://isharesblog.com/blog/2011/06/09/ ... dividends/
http://www.bogleheads.org/wiki/Tax_gain_harvesting

[alvinroast]

Under current tax law, you pay 0% on { Long Term Capital Gains } if you are in the 15% bracket.

I didn't even know this as I'm regularly in the 25% bracket. I seem to be just over the line. Maybe I should lower my income a tad!

We're actually putting an extra $12k into my wife's lame 401k just to get into the 15% bracket. While we don't have much in the way of LTCG we will have plenty of dividends to harvest at 0%. Unfortunately in this crazy market conservative dividend paying stocks aren't doing as well as AAPL. The good news is even if the stocks have a capital loss we can carry that over to next year while getting the dividends tax free*.

There's also something very appealing about a 15% marginal tax rate to me. I will enjoy it while it lasts.

[dualstow]

alvin roast wrote:
We're actually putting an extra $12k into my wife's lame 401k just to get into the 15% bracket

I suspect this is a true financial newbie question but how does that work?
I thought the bracket was just based on income and marital filing status.

[alvinroast]

That $12k cuts this year's modified AGI to 70,663 just barely getting us into the 15% bracket (using $3k from capital loss carryover). We may modify it a bit later in the year if things seem to be changing or we're cutting it to close. Right now there's only $37 keeping us from going over (70,700 is the line) so I may be more comfortable with another $1000 just in case. I suppose in a pinch we could withdraw the Roth contributions and put that into a TIRA, but I'd rather not go there.

Of course if you don't think this will work tell me so I can adjust. I haven't run it by our accountant and probably won't until after the 2011 returns. I may have missed something, but this being the first year without the interest deduction it really should be easy to calculate.