A member of the Investment Management Consultants Association, Herbert Roy Zucker has three decades of experience in the financial services industry. A qualified portfolio manager offering discretionary portfolio management to high net worth clients, Herbert Roy Zucker is a senior financial consultant at Merrill Lynch. In early 2021, the wealth management firm published an article on strategies investors can use to minimize capital gains taxes when selling portfolio investments.
Selling investments can trigger capital gains taxes. With rates in the range of 20 percent, investors may end up netting only 80 percent of their capital gains. Thankfully, there are strategies that they can take to minimize their capital gains taxes. One of these is to offset capital gains with capital losses. Offsetting gains with losses involves selling a small part of the portfolio that is down. If a big part of an investor’s portfolio is up while the other is down, they can sell the investments that are down and claim the losses they incurred on their tax return. Investors can deduct up to $3,000 of capital losses in a year. If their losses exceed the yearly limit, investors can carry them to the next year. If an investor wants to keep the investments that are down because they believe in their potential in the long run, they can sell them, offset the losses incurred, and then repurchase them later. The repurchase, however, must be done more than 30 days after the sale. There are other options to reduce capital gains taxes. They include donating more efficiently and realizing capital gains over different years. Investors should work with qualified investment and tax professionals to help them minimize taxes on their capital gains.
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AuthorHerbert Zucker - New York Entrepreneur and Financial Executive. Archives
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