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Warady & Davis Blog – The Idea Exchange (TIE)

2 reasons to sell highly appreciated assets before year-end

If you own highly appreciated assets you’ve held long term, it may make sense to recognize gains now rather than risk paying tax at a higher rate next year: 1. The 15% long-term capital gains rate is scheduled to return to 20%.2. Higher-income taxpayers will be subject to a new 3.8% Medicare tax on some or all of their net investment income.As Congress and the President negotiate on how to address the fiscal cliff, it’s still unclear whether the 15% rate will be extended — especially for higher-income taxpayers.Because a final deal in Washington may not be reached until the very end of the year — or even after Jan. 1 — you can’t necessarily afford to take a wait-and-see attitude. And the new 3.8% Medicare tax will go into effect regardless of what happens with the fiscal cliff. If you have questions about the potential tax impact on your investments, please contact us at 847-267-9600.Be aware that the tax-planning concepts discussed herein are intended only to provide an overview and until Congress acts, it is impossible to predict with any certainty the shape of the tax landscape in 2013. Be sure to discuss your situation with your tax professional before taking any action.


If and only to the extent that this publication contains contributions from tax professionals who are subject to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, the publisher, on behalf of those contributors, hereby states that any U.S. federal tax advice that is contained in such contributions was not intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose.