While I was driving home from taking the COVID-19 test, I heard some discussion on KPCC (public radio) about Biden’s plan to get rid of long-term capital gains. In addition to raising the top marginal income tax rate, long-term stock gains could be taxed at 39% instead of 23.8%. That’s about 15% difference. This is important to me since I am planning a long slow retirement if I can’t get a kidney transplant soon. My current compensation at work had a fairly large stock component, and right now, there is an offer out to buy employee stock. The most important decision on which shares to sell always comes down to complex tax regulations.
Currently, the thought is to sell shares with the highest cost basis that’s been held for more than a year. This way, you minimize the capital gains due to the high cost basis, and qualify for long-term capital gains tax rate. If you think the tax rate on the stock sale will increase by 15% next year, then you would sell the cheapest stock to maximize gains, which are taxed at 15%-24% (capital gains). Otherwise next year you may have to pay a lot more for the same stock sale.
It all depends on who you think will wind the election in a few months. I already got screwed by Trump over his $10,000 limit on SALT (state and local tax deduction). It’s only fair that I get screwed by the Democrats too.
Life with chronic diseases 