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Pay ZERO tax on capital gains in ’13

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in Small Business Tax,Small Business Tax Deduction Strategies

That’s not a misprint. You can qualify for a 0% tax rate on some or all of your long-term capital gains realized in 2013. This unique tax break, recently extended by the American Taxpayer Relief Act (ATRA), isn’t necessarily off-limits to taxpayers who are doing OK financially.

Strategy: Figure out how much capital gain you might fit under the threshold. The 0% rate applies to taxpayers who end up in the 10% or 15% regular income tax brackets.

For instance, you may qualify for pref­­erential tax treatment if your busi­­ness incurs a loss this year or you defer a substantial amount of income to future years. Alternatively, you might shift some of your capital gain assets to your children or grandchildren who are eligible for the 0% tax rate.

Here’s the whole story: As part of the “Bush tax cuts,” the maximum tax rate on net long-term gain was lowered from 20% to 15%, beginning in 2003. For taxpayers in the two lowest tax brac...(register to read more)

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