So if you have $10,000 in gains and $12,000 in losses, you won’t owe any capital gains tax on the $10,000, and you will be able to deduct $2,000 from your regular income.
A traditional IRA can be funded with before-tax dollars (thereby reducing the money you have to pay income tax on for 2024).
If you give them to a grandchild, their capital gains basis is the value of the shares the day they receive them.
Whereas if you first sold the shares directly you’d owe capital gains tax on the $8,000 gain, leaving you with anywhere from 15% to 37% less in cash to give them, depending on whether the gain was short- or long-term and depending on your tax bracket.
It is money that is exempt from income tax, as well as Social Security and Medicare taxes.
Persons:
”, Dan Snyder, won’t, it’s, hasn’t, Roth, you’re, You’re, Mari Adam, Adam, “
Organizations:
CNN, ”, Tax Foundation, Social Security, IRS
Locations:
Massachusetts , Oregon, Rhode