YOUR TAX PLANNING CHECKLIST FOR 2024
4 . Consider using Charitable Trusts to sell highly appreciated assets This allows you to achieve capital gains tax deferral when selling appreciated assets , create a long-term income flow for yourself and your heirs , favor selected charities , and take advantage of an up-front income tax deduction that you can use over six years .
Income Tax Planning - Capital Gains Tax
Capital gains tax can end up impacting your investment portfolio income in big ways . Here are some strategies to consider in order to minimize this impact , maximum your investment returns and share your wealth with heirs and your favorite charities :
Harvest unrealized capital losses Stock sitting at an unrealized loss can be sold , creating a tax loss , and be used to off-set realized taxable gains . Such strategies need to consider the Wash Sale rules .
Defer tax on capital gains by investing proceeds into a Qualified Opportunity Zone Fund Capital gains from any investment can be deferred until April 2027 if reinvested into a Qualified Opportunity Zone Fund . Furthermore , the Federal tax on the gains within the Fund can be 100 % eliminated if held for 10 years . Capital gains must be reinvested within 180 days of the date realized .
Establish installment sale agreements Push tax liability further into the future by “ stretching ” the receipt of proceeds into the future . This is particularly appropriate for an existing business .
Rollover real estate Gains from rental real estate may be fully deferred by investing the proceeds into a new rental using a Section 1031 Rollover or a 1031 Fund .
Section 83 ( b ) election with pre-IPO options grants If a Section 83 ( b ) election is filed within 30 days of the option grant date , the option compensation element would be taxed at ordinary income tax rates . However , this can allow a higher percentage of the future stock appreciation to be taxed at favorable long-term capital gains tax rates .
Concentrated Stock Positions
Having one company ’ s stock represent a large portion of a portfolio can put investors in a riskier position over the long term . Here are some tactics to consider with a concentrated stock position .
Use Long-Term Capital Gains preferential rate The capital gains tax bracket rate is 15 % up to $ 583,750 total income for MFJ in 2024 . It is 20 % where taxable income is above those thresholds .
Manage positions and stock exercises strategically With incentive stock options ( ISOs ), actively manage Alternative Minimum Tax ( AMT ) generation on stock exercises and plan to re-coup AMT credits as soon as possible . pg . 4