Capital Gains Taxes and Your Investments

The New Investor's Guide to Understanding Capital Gains and Capital Gains Taxes

It's important that all new investors understand capital gains and the role capital gains taxes play in your portfolio. By simply holding assets in certain types of accounts, or making sure you reach certain holding period lengths, you might be able to save tens of thousands of dollars or more in capital gains taxes that would have been owed! That's money that ends up in your pocket for your own family, rather than being sent to Washington, D.C. I put together this guide to capital gains to help you understand some of the things you need to know and understand before jumping into investing.

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Capital Gains Basics

Capital Gains Basics

Before you can start understanding how to lower your potential capital gains taxes, you need to understand what capital gains are and how they are treated differently by the government depending upon what you own. This brief introduction was designed to help you learn those basics in under two minutes. More

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A Step-By-Step Guide to Capital Gains Tax Rates

Capital gains tax rates guide

How much will you pay in capital gains taxes when you sell a stock, bond, mutual fund, gold, silver, work of art, or real estate?  It all depends. This step-by-step guide to capital gains tax rates was designed to give you an overview of how long you need to own an asset to qualify for lower capital gains tax treatment.  You may be surprised by what you find.  Gold, for instance, isn't taxed as an investment, but a collectible, at nearly twice the rate of stocks More

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Capital Gains Tax Holding Periods

Capital Gains Tax IRS

Did you know that the length of time you hold and investment could have huge implications for the total capital gains taxes you owe the IRS at the end of the year? In some cases, holding a stock, bond or mutual fund for just a few more days could save you hundreds of thousands of dollars. This extremely important concept is vital for you to understand, especially if you are inheriting investments or putting aside money for the distant future. More

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Why You Need to Fear the Dreaded Capital Gains Wash Sale Rule

wash sale rule for capital gains

If you aren't careful, you may trigger the dreaded capital gains wash sale rule and find yourself taking a tax deduction from which you have inadvertently disqualified yourself! If you don't know the wash sale rule or how it changes your capital gains tax reporting, take the time to read this short explanation. It can help you avoid making a very expensive mistake. More

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Did You Know You Can Avoid Paying Capital Gains Taxes By Donating Your Stocks?

Donating Money to Reduce Capital Gains Taxes

Actually, it isn't just stocks. You can avoid paying capital gains taxes by donating almost any asset, including real estate, mutual funds, or bonds, to your favorite 501(c)3 charity. That means more cash going to to your favorite causes instead of the IRS. There are some rules you need to follow, but if you have a good investment and you want to support a worthy cause instead of paying capital gains taxes, here are some ways you can do it. More

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Don't Join the Capital Gains Cult!

capital gains cult

Capital gains are great! There's nothing better than buying something for $20 and selling it for $150. Still, there is a body of evidence that shows almost all stock market returns come from reinvested dividends. The bull market that ran from 1982 through 2000 convinced many investors that their success depended upon capital gains only. Nothing could be further from the truth. I cannot overstate the importance of you learning this lesson. Stop what you are doing and find out the truth about capital gains and the role they play in your returns. More

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Learning to Calculate Total Return on Your Investments

Calculating Total Return and Capital Gains

To know how well you are doing when it comes to investing, you need to learn how to keep score. There are two scores that matter to you as a new investor: 1. total return, and 2. compound annual growth rate. Both are fairly easy to learn and the capital gains earned on your investments represent an important part of the calculation. In a few seconds, you're going to discover how to perform these two calculations yourself, putting you ahead of most finance majors. More

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Did You Know You Might Be Forced to Pay Someone Else's Capital Gains Tax?

It's true. If the stars align wrong and you happen to buy shares of a mutual fund that have built-in capital gains, it is possible that you may be forced to pay capital gains taxes despite losing money! To avoid this horrible fate, check out ways you can protect yourself. More

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Asset Placement Capital Gains Strategy

There is a special investing strategy that is easy to use and can save you tons of money in capital gains taxes. Every new investor needs to study it and put it to work in their own portfolio. What is this magic formula? It's called asset placement. By putting certain types of investments in certain types of accounts, it's possible you could save yourself huge capital gains tax bills. More