INSIGHTS & IDEAS

Lower Capital Gains Rate

   If you sell stock held for more than 1 year, generally the gain will be taxed at 15% (plus state taxes).  If you are in the lowest tax bracket (your children), the gain is taxed at only 5% (0% in 2008 through 2010) for federal purposes.   Gifting the stock to your children (18 and over, 24 and over if a student in certain cases) who, in turn, make the sale, can save you 10% in tax.   When incorporating children into your tax planning, be sure to consider the possible effects on financial aid for higher education.

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