April11

Pay Lower Taxes on Stocks

It has always been the consideration of many traders to make use of financial tools that will not only earn for them huge profits but also give them the best incentives like the small or no charging at all of taxes. Taxes can easily make a dent on your projected income and having to do without them would be a very pleasant possibility. This is why it is very important to consider where you are investing especially when it comes to the tax efficiency angle.

Posted by admin under cheapest online stock trading

4 Responses to “Pay Lower Taxes on Stocks”

  1. Mindy727 Says:
    April 11th, 2010 at 2:08 pm

    When you sell stocks or bonds, are the taxes lower if sold after death?

  2. hooterville Says:
    April 11th, 2010 at 7:10 pm

    They are passed to the heirs at the value of the date of death, so if you are still living and sell a stock at a gain, you pay tax. If you don’t sell and leave someone the stock, no-one is taxed and
    the heir’s tax basis is value on date of death.
    References :

  3. strath Says:
    April 11th, 2010 at 7:12 pm

    O I love this question. It’s always so much fun, after one’s death, to continue to trade one’s portfolio.

    Sorry, just kidding. The answer is that No, a deceased party is deemed by the tax authorities to have sold/disposed of his entire portfolio on the day of his death. Therefore taxes will be assessed on the market value of the portfolio, and all income including capital gains and losses will be taken into account.

    The estate executors will have to prepare a final income tax return as of the date of death. In some cases, when stocks have been held for many years, there can be substantial capital gains. Taxes will be paid from the deceased’s estate. If taxes are substantial, there will be less of the estate left for the heirs.

    This is why many persons consult advisors and take steps to mitigate any huge potential capital gain while they are still alive.

    ps: hooter doesn’t have it quite right; the estate will indeed pay the taxes before any distribution to the heirs.
    References :

  4. scow_sailor1692 Says:
    April 11th, 2010 at 7:14 pm

    Are we talking estate taxes?

    There are two valuation methods to use. One is the date of death and the other is 6 months after the date of death.
    References :