Broker Check


| April 29, 2021

Don’t panic just yet.  The stock market rollercoaster resumed last week based on the expectation of a significant increase to the capital gains tax for wealthy investors, but this proposed bill is far from being passed.  Proper expectations are that, if you are a wealthy investor, you will likely pay more capital gains taxes in the future than you do now.  To learn more about what is expected to be proposed this week, click HERE  for a short CNBC article. 

If a significant capital gains tax is eventually passed, it will no doubt effect financial planning and tax strategy.  Lower turnover investment options (generate less capital gains), qualified accounts such as 401(k) and IRA, and annuities which offer tax deferral will gain in popularity and utilization.  Tax deferment strategies such as 1031 and 1035 exchanges will also be more compelling.  

As always, when major tax reform is passed, there will be a cat and mouse game played as to how best to navigate and minimize taxes.  Understanding tax implications as you make financial decisions is critical.  Numerous times, I’ve encountered people who got a major tax surprise when they filed their return based on a financial transaction that took place the prior year.  If capital gains taxes do go up, it will become even more crucial to think ahead and plan accordingly. 

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We hope you find this week’s Weekly Market Review both informative and interesting.  Have a great week!

Trevor N. Coe, CFP®