Selling inevitably leads to taxes, but investors can minimize the amount of money they pay to the government with some careful planning. Below are five things you need to know in order to trim your investment taxes:
1. Capital-gain rates are up for the wealthy.
Tax controversy lawyers are constantly thrown a myriad of issues that reflect the government’s current agenda. The latest segment that has grasped tax lawyers’ attention is the application of the passive activity loss rules. In addition to several audits in this area, the Tax Court has been issuing opinions about passive activity loss rules on a regular basis.
According to the Supreme Court, in a recent case involving the Bankruptcy Code’s exemption for retirement funds, a retirement account is not a retirement account if it is an inherited IRA and the owner is bankrupt.
Typically, when a person files for bankruptcy, funds they set aside for retirement can be exempt from the estate.
The IRS has adopted the Taxpayers Bill of Rights, a new list that will become a guidebook for taxpayers to help them understand what services and courtesies they are entitled to. A recent survey showed that most taxpayers didn’t even know they had specific rights before the IRS introduced the Taxpayer Bill of Rights.