The maximum tax rate for long-term capital gains in 2007 is only 15 percent for high-income taxpayers. Seems like a pretty good deal, right? Even better, the rate is a minuscule 5 percent for some lower-income taxpayers. But how low can you go if you really try?
Strategy: Start planning now to reduce taxable income for 2008. If you can keep your taxable income below the magic cutoff point, the tax rate on your long-term gains will hit absolute rock-bottom at zero.
If you play your cards right, you won’t owe any federal income tax on long-term gains when you sell securities and other capital assets in 2008. Alternatively, you might shift some assets to your children to benefit from the zero percent capital gains rate.
Here’s the whole story: Thanks to the tax law passed back in 2003, the maximum tax rate on long-term capital gains was reduced from 20 percent to 15 percent for everyone in an ordinary-income tax brack...(register to read more)
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