Capital Gains Taxes

While we are not in the the business of providing tax advice, we try to minimize the tax burden our clients face when we manage their assets.  One of the keys to minimizing taxes is to understand the difference between short-term and long-term capital gains.  In general, short-term capital gains (the profit made on the sale of a security) are taxed at higher rates than long-term capital gains.  A security is considered to be subject to a long-term gain if it has been held for a year or more.

One other strategy that can be used to reduce the capital gains tax bite is to offset gains with losses.  If done correctly, a dollar of capital gains can be offset with a dollar of capital losses.  But beware of the “wash sale” rule.

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