Two 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:

  • The 15% long-term capital gains rate is scheduled to return to 20%.
  • 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 your Meaden & Moore representative or Pete DeMarco at 216.241.3272 or pdemarco@meadenmoore.com.