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Well, the short answer is that it doesn't work that way. As an example of a loophole, investors can buy stock in a company, hold it for five years, and current
by jeremyt 11y ago
Well, the short answer is that it doesn't work that way.
As an example of a loophole, investors can buy stock in a company, hold it for five years, and currently get 0% capital gains on the appreciation.
You don't need an intermediary to do this; you can do this right now.
It's just that most regular people don't have the money to invest, and if there's no money to invest then there's no money to apply toward loopholes.
And then you have to pick winners.
Same thing with putting company investments in Roth IRAs. This tax loophole would be idiotic for any normal person, but with somebody who's not planning on using the Roth for retirement it makes perfect sense.
But, you have to pick winners or Joe sixpack just lost his retirement savings.
- ageek123 11y agoJust to clarify for those who might misinterpret what you said, the top long-term capital gains tax rate is 23.8%. The only people eligible for 0% long-term capital gains tax rate are people in the lowest tax brackets.
- jaycroft 11y agoI believe the parent is referring to Qualified Small Business Stock. New issues of stock (meeting certain requirements: certain date ranges, company must be valued at less than $50M, keep all it's assets in "productive" investments, not passive such as real estate or other stock) can be completely excluded from long term capital gains tax. https://blog.wealthfront.com/qualified-small-business-stock/ https://blog.wealthfront.com/qualified-small-business-stock/ has a nice summary.
- jeremyt 11y agoOr: http://www.jeremytunnell.com/posts/a-guide-to-section-1202-tax-benefits-for-entrepreneurs http://www.jeremytunnell.com/posts/a-guide-to-section-1202-t...
- XorNot 11y agoYou don't have to pick winners - but you do need enough up-front to both diversify and take the liquidity hit.
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