This final tip in Forbes’ ten rules for building wealth starts dabbling in tax implications and how income and capital gains taxes will affect you investment decisions. The two tips they gives:
- Be aware of whether your sale will be a short term or long term capital gain. A short term capital gain will be taxed at your income tax bracket whereas a long term capital gain will be taxed at a mere 15% – regardless of your income tax bracket.
- Sell losers before the end of the year and they can offset winners. “…It can be a good move to sell losers in your portfolio to take advantage of the annual $3,000 capital-loss deduction limit and offset any capital gains on your winning picks.”