Under current law, in 2013 high income taxpayers will face a
3.8% surtax on their investment income and gains. In addition, if the current tax laws are not
extended, all taxpayers will face increased taxes on investment income and
gains, not to mention higher tax rates on ordinary income.
The 2012 maximum long-capital tax rate may be lower than in
2013, depending on extensions of tax laws enacted years ago. In 2012, the maximum long-term capital gain
tax rate is 15%, but that is scheduled to increase to 20% (18% for assets held
more than five years).
Due to the upcoming election, no one can predict what will happen
between now and year-end. But, one thing
is certain, you should consider whether to sell your investments in 2012. Tax rates should not govern your decision. It also depends on whether appreciation is
likely in future years, the need for funds for health, support, or education, and
gift tax or estate planning purposes.
