04/25/2021
If you have an 11-month investment that gains $50,000. If you sell that investment today, your federal tax will be calculated as 24% of that gain, if you are single. However, you can make tax-smart decisions on your investment as simple as using the three approaches below:
Approach #1: Held on your investment for at least one year, your tax will be calculated at 15%, which results in $7,500 in federal tax
Approach #2: Seld another investment at loss to offset that investment. For example, you take a $35,000 loss in another investment, your tax will be captured at $15,000 at 24%. The tax bill will be $3,600.
Approach #3: Combine approach #1 and #2, which is selling the investment after one year and sell another investment at $35,000 loss. The tax bill becomes $15,000x 15% = $2,250.
Source: Charles Schwab OnINvesting, 2021
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