2 reasons to sell highly appreciated assets before year end


If you own highly appreciated assets you’ve held long term, it may make sense to recognize gains now rather than risk paying tax at a higher rate next year:

  1. The 15% long-term capital gains rate is scheduled to return to 20%.
  2. Higher-income taxpayers will be subject to a new 3.8% Medicare tax on some or all of their net investment income.

As Congress and the President negotiate on how to address the fiscal cliff, it’s still unclear whether the 15% rate will be extended — especially for higher-income taxpayers.

Because a final deal in Washington may not be reached until the very end of the year — or even after Jan. 1 — you can’t necessarily afford to take a wait-and-see attitude. And the new 3.8% Medicare tax will go into effect regardless of what happens with the fiscal cliff. If you have questions about the potential tax impact on your investments, please contact us.