Topic: Capital Gains

Is Obama Closing Retirement Savings Loopholes or Just Curbing Congress’ Generosity?

By :: January 28th, 2015

In his upcoming budget, President Obama will propose to strip away the “loopholes” that permit wealthy individuals to accumulate large amounts in tax-favored retirement plans. He would prohibit a taxpayer from contributing any more to IRAs or other qualified retirement plans once his or her accounts reach a combined value of $3.4 million. For sure, […]

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President Obama Targets the "Angel of Death" Capital Gains Tax Loophole

By :: January 18th, 2015

The President plans to announce in Tuesday’s State of the Union Address new proposals that would raise taxes on capital gains for the wealthiest Americans. The proposal would raise the top tax rate on long-term gains and qualifying dividends to 28-percent (including the Affordable Care Act’s 3.8 percent investment income surtax on high-income taxpayers). The […]

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One Downside Of Inversions: Higher Tax Bills For Stockholders

By :: August 20th, 2014

Corporate inversions are all the rage these days as U.S. businesses merge with foreign firms and then restructure the combined businesses as foreign-based corporations. That yields tax benefits and may boost their after-tax profits, but it can also leave their stockholders with unwanted capital gains and big tax bills. As Howard Gleckman explained in TaxVox […]

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Abuse of financial products by hedge funds

By :: July 22nd, 2014

Today, I testified before the U.S. Senate Permanent Subcommittee on Investigations (the “Subcommittee”) on the abuse of structured financial products by hedge funds, in particular by the Renaissance funds. This is what I told the Subcommittee: Almost a century ago, Congress reduced the tax rate for long-term capital gains. Then, long-term meant holding assets for […]

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State Taxes and the April Surprise

By :: July 22nd, 2014

In recent months, several governors have complained about the April, 2014, surprise in state tax revenues. They say they were shocked when personal income tax payments fell far below expectations. They shouldn’t have been. What happened? In part, in an effort to beat an upcoming increase in capital gains taxes, investors accelerated realizations into tax […]

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A Flash Tax for the Flash Boys

By :: April 18th, 2014

Michael Lewis spotlights high-frequency traders with his new book, Flash Boys.  These traders use high-speed computers and fast connections to outrace investors, and other traders, to the market.  They now account for more than half of all U.S. stock trades.  And the flash boys spend billions to save milliseconds (by, for example, laying expensive fiber-optic […]

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You Could Owe Capital Gains Taxes When You Spend Bitcoin

By :: March 27th, 2014

The IRS determined this week that Bitcoin and other digital currencies should be taxed as property, not currency. This means Bitcoin transactions will be taxed as capital gains, not as ordinary income. But, perhaps surprisingly, the act of spending Bitcoin could trigger capital gains taxes. Thus, the use of virtual currencies as a medium of […]

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Camp Defines Private Equity as a Business, Would Boost Taxes on Carried Interest

By :: February 27th, 2014

In the tax reform roadmap he released yesterday, House Ways & Means Committee Chair Dave Camp (R-MI) targeted the trillion dollar private equity industry.  Not only did he propose to tax the compensation of private equity managers at ordinary rates rather than lower capital gains rates, he also called the industry out. The official description […]

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Incoming Senate Finance Chair Wyden Outlines His Tax Agenda

By :: February 10th, 2014

Senator Ron Wyden (D-OR), about to become the new chairman of the Senate Finance Committee, said Friday that he aims to eventually rewrite what he described as a “dysfunctional, rotting mess of a carcass that we call the tax code.” But in an acknowledgement of the challenges of tax reform, Wyden said he wants to […]

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Do Private Equity Firms and their Partners Owe Ordinary Income Tax Under Today’s Law?

By :: June 25th, 2013

For a decade, Congress has been debating how to tax managers of private equity firms. The argument is pretty familiar to tax wonks: Should these partners treat this compensation (commonly called carried interest) as capital gains, as they do today? Or should they be taxed at the higher ordinary income rate as President Obama and […]

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