Should I sell appreciated investments or harvest losses now to offset higher future capital gain taxes?
JGTRRA reduced the capital gains rates. As a result, the current capital gains rates are 0 percent for taxpayers in the 10- and 15-percent income tax brackets and 15 percent for taxpayers in higher tax brackets. However, these capital gains rates are to sunset to the pre-JGTRRA rates in 2011, increasing capital gain rates to 10 and 20 percent, respectively. JGTRRA also effectively lowered the taxes on qualified dividends by taxing them at capital gains tax levels rather than as ordinary income. However, this provision also is set to sunset after 2010. As a result, dividends would be taxed again at the higher ordinary income tax rates. However, some lawmakers are suggesting legislation to retain the 0- and 15- percent tax rates for capital gains and dividends, but add a 20-percent rate for higher income earners – namely, single filers earning more than $200,000 and married couples earning more than $250,000. If Congress does not block the sunset, then affected taxpayers who have investm
