Will long-term capital gains be taxed in 2008?
July 8, 2005
Date: Wed, 08 Jun 2005
I heard that long-term capital gains won't be subject to federal income taxes in 2008. Is that correct?
Hope you'll answer in your next newsletter.
Date: Fri, 01 Jul 2005
There is a very limited exclusion for long-term capital gains in 2008. It was adopted in the Jobs and Growth Tax Relief Reconciliation Act of 2003.
The zero percent rate applies for individuals in the 10% or 15% brackets. If the law applied in 2004, the maximum taxable income for a single person would be $29,050 or $58,100 for married, filing jointly.
The zero percent rate will provide a special opportunity where tax can be avoided by shifting long-term capital gains by making gifts to children over age 13. The other major beneficiaries of this provision will be retired persons with low income.
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