Q. My friend insists he’s better off passing up the capital gains rate for bigger deductions. Is that possible? R.N., Pawtucket, R.I.
A. Yes. Your friend is likely referring to a special election for investment interest expense. The deduction is limited to the amount of your net investment income for the year. But you can choose to have capital gain income (e.g., gains from securities sales) count as net investment income. In that case, you forfeit the lower tax rate on long-term capital gains in exchange for a bigger investment interest expense deduction. Figure things out both ways.
Tip: You can make the tax return election for all of your gains or only certain selected gains.
Like what you've read? ...Republish it and share great business tips!
Attention: Readers, Publishers, Editors, Bloggers, Media, Webmasters and more...
We believe great content should be read and passed around. After all, knowledge IS power. And good business can become great with the right information at their fingertips. If you'd like to share any of the insightful articles on BusinessManagementDaily.com, you may republish or syndicate it without charge.
The only thing we ask is that you keep the article exactly as it was written and formatted. You also need to include an attribution statement and link to the article.
" This information is proudly provided by Business Management Daily.com: http://www.businessmanagementdaily.com/14102/why-you-might-forgo-capital-gains-rate "