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Ep. 84 Taxing Unrealized Capital Gains
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“Taxing Unrealized Capital Gains: What You Need to Know”
Current Taxation System:
- Under the current system, taxpayers pay taxes on the growth in the value of their assets when they are sold (realized gains).
- Short-term gains (assets held for less than one year) are subject to ordinary income tax rates.
- Long-term gains (assets held for over a year) are taxed at a top rate of 23.8%.
Kamala Harris’ Proposal:
- Harris has proposed taxing unrealized capital gains for individuals.
- These taxpayers would report unrealized gains annually, including basis (original purchase price) and market value as of December 31.
- The tax applies if the individual does not pay at least a 25% tax rate on their income (including unrealized gains).
- Payments can be spread out over subsequent years.
Implications and Controversies:
- The proposal aims to address wealth inequality and capture gains from appreciating assets.
- Critics argue that it could be complex to implement and may have unintended consequences.
- Supporters believe it could generate revenue for social programs and reduce tax avoidance.
Disclaimer: This is not tax, legal or investment advice. Each person's circumstance is different and your situation may be different. Feel free to reach out for a consultation. Contact smoran@redbarnfinancial.com visit www.redbarnfinancial.com or call 615-619-6919
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