3/15/2023 0 Comments Stock calculator![]() This analysis does not consider the federal alternative minimum tax (AMT) or take into account the deduction for state and local taxes paid (limited to $10,000 annually) that is available if you itemize deductions. LTCGs are generally subject to federal income tax at rates up to 20% (plus the NII tax that applies – see below) higher LTCG rates apply to collectibles, section 1202 qualified small business stock and section 1250 real property, the effect of which is not shown here. ![]() Tax rates for qualifying widow(er)s are the same as indicated for “Married Filing Jointly.”ġ Long-term capital gains (LTCGs) are gains recognized on the taxable disposition of a capital asset held for more than one year. The displayed LTCG tax rates have been rounded to the nearest hundredth of a percent.ĭiversification does not assure a profit or prevent against loss.Ī Taxable income is your annual gross income for federal tax purposes, less adjustments and the federal deductions you claim (standard or itemized).ī The "Married Filing Separately" and "Qualifying Widow(er)" filing status are not given as options on this calculator, but may apply to you. Indicated rates are the combined net federal, state and local income tax and net investment income (NII) tax rates that apply to an incremental dollar of your long-term capital gains (LTCGs), which may vary from your average tax rate for LTCG. Indicated tax rates are those in effect for as updated. The calculator has many inherent limitations, and individual results may vary. The calculator makes certain assumptions that may not apply to you. You bear sole responsibility for any decisions you make based on the output of this calculator. The output is general in nature and is not intended to serve as the primary or sole basis for investment or tax-planning decisions.įor more individualized information, you should consult your tax advisor or investment professional. ![]() The indicated capital gains tax treatment applies to positions in securities held outside qualified retirement plans and other tax-deferred or tax-exempt investment vehicles. individual taxpayers resident in the 50 states or the District of Columbia, and is not applicable to trusts, estates, corporations or persons subject to special rules under federal, state or local income tax laws. The output of this calculator is for educational purposes only and should not be considered investment, legal or tax advice. In evaluating your options, you may want to consider the information below. There are ways other than a taxable sale of stock by which you can address the risk of concentrated stock positions. For many investors, capital gains taxes (including state and local taxes) of up to 37% of the value of their investment may seem too high a price to pay for diversification. Selling low-cost stock from a taxable account involves a tradeoff between the known upfront tax and transaction costs and the uncertain future benefits of risk reduction. Most financial advisors therefore recommend that clients restrict single-stock positions to prudent limits, typically not more than 10% of portfolio value.įor taxpaying investors, the biggest impediment to diversifying low-cost stock is often capital gains taxes. Lehman Brothers, Enron and other prominent failures of recent decades remind investors that no company, no matter how strong or well-positioned it may seem, is immune from risk. Whatever the background, investors with concentrated stock positions face the risk that a change in the fortunes of a single company could jeopardize their financial well-being. Or the stock may have achieved its dominant position simply by outperforming other holdings over time. In other cases, the oversized holding was acquired through a merger or acquisition. Sometimes the stock that dominates a portfolio is that of a current or former employer. Many successful investors hold portfolios that are too heavily concentrated in a single stock. How should I deal with concentrated stock positions?
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |