Everyone wants to wind up in the black when it comes to making a sale. You want to sell your home for more than you purchased it for. You want your collectibles to increase in value so you can sell them at a profit. Your finances are also subject to this principle, called capital gains, where you sell an investment for more than what you spent to buy it. This gain is likely then put in your pocket, in one form or another.
However you acquire your gains, tax code requires you to report them every year. While there are differences in the tax rates for short-term gains and long-term gains, as well as based on your tax bracket, the end game remains the same – you will likely owe the government money if you profited from the sale of eligible assets.
For those of you with investments, you realize that while some go up in value, others decline. If you sell something for less than what you purchased it for, you have a capital loss on your hands. While seeing elements of your portfolio decrease in value is never enjoyable, the silver lining is that capital losses on your investments can offset your capital gains.
As a financial advisor, it’s my job to monitor your capital gains & losses, as well as communicate them with you appropriately so you can remain compliant with tax laws. While I don’t offer tax advice myself, I’m happy to speak with your tax advisor to ensure your tax strategy and your investment strategy are aligned and answer any questions they may have about your portfolio. Contact me if you'd like me to help!