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Trevor's Weekly Market Reviews

| December 17, 2019
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They did it!  Our Congress, saddled with a dreadful approval rating, agreed on a spending bill last week avoiding another government shutdown.  Notable Number 2 of the Weekly Market Review details how long it would take to pay down the growing national debt if a payment of $1,000,000 was made every single minute.  What is potentially more alarming than that interesting math equation is the spending bill impacts less than one-third of the anticipated total government spend, with the remainder being on mandatory items such as Social Security and Medicare.

Have a losing investment inside a non-retirement account?  Don’t forget that you can sell an investment that has not gone as planned for a capital loss.  Capital losses can be useful to help offset capital gains by an unlimited dollar amount.  If you have sold something in 2019 for a large capital gain, consider pairing that gain up with a capital loss.  It is unlikely to have more losses than gains in a year like 2019 where the investment markets have been so good.  However, if your realized capital losses do exceed your capital gains for the year, you can take up to $3,000 of capital losses against your taxable income.  Any unused capital loss can then be carried forward to be used in a future tax year against capital gains or income.

0% Capital Gains tax-rate opportunity notice: 

If your total gross income, including capital gains and any other income sources falls below certain amounts, you may be able to make a sell, realize a capital gain, but not owe any capital gains tax.  This gives investors the opportunity to sell positions with a profit and not owe any tax.  Another advanced strategy, would be to repurchase the securities that we sold after 30 days and reset their cost basis to a higher amount, reducing the taxable gain they hopefully realize in the future.  It is very important to thoroughly understand your current taxable income details and to consult with your tax professional before employing this strategy.

0% Capital Gains Tax-Rate Limits:

  • Single tax filers - total income including capital gains would need to be less than $51,575.
  • Married filing jointly - total income including capital gains would need to be less than $103,350

 

As always, we hope you find this week’s Weekly Market Review both informative and interesting.

Click HERE for the Weekly Market Review

Trevor N. Coe, CFP

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