Anticipating a Change in Capital Gain Rates

Jacob Stein Esq.
November 25, 2008 — 1,447 views  
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There is a lot of excitement in Washington coming on the heels of the election. Change is in the air, and with this change comes the promise of higher income taxes.

None of us can predict how the new administration and the new Congress will change the tax Code. We can be fairly certain that they will increase the marginal tax rates. Specifically, there is an expectation of an increase in the capital gains tax rate. How can we plan for that?

We do the opposite of what is instinctive and what our training tells us to do. We accelerate taxable events into 2008, as opposed to trying to push them back into 2009. Congress does not increase tax rates with retroactive application to a prior calendar year. Congress can increase tax rates in 2009 with retroactive date of January 1, 2009.

If you are thinking of selling your assets, sell them today. Do not wait until 2009, unless you have a very good reason. Almost every other tax attorney and tax accountant that we have discussed this with holds to this point of view and for a good reason. The new administration is no friend of the taxpayer.

For more information on this and other tax planning strategies, visit

Jacob Stein Esq.


Mr. Stein is a partner with the law firm Boldra, Klueger and Stein, LLP, in Los Angeles, California. The firm's practice is limited to asset protection, domestic and international tax planning, and structuring complex business transactions. The firm's goal is to provide the highest quality legal work that is usually associated with only the biggest law firms, in a boutique firm setting. Jacob received his law degree from the University of Southern California, and his Master's of Law in Taxation from Georgetown University. Mr. Stein has been accredited by the State Bar of California as a Certified Tax Law Specialist and is AV-rated (highest possible rating) by Martindale-Hubbell.