gregorygarver.com

[RobertB]

My wife just got back from a vacation in Mexico.. two days ago , She is already at it. At the supper table last night she is into her obbession..allready. she informs me that a life insurance policy that I have , I will be specific for clarification purposes for 3 mil with PRU that went public in Jan 04 issued me 12,400 ?some odd shares at 35.00 or 28.00can`t remenber exactly now but anyhow that has risen to almost 17,000 shares today at 101.00 it is projected shortterm 125.00. she wants to sell before dems raise the 15%capital gains tax in 08 . I suggested keeping it long termby creating a trust fund in kids name , and moving some major real estate holdings at a drastic loss into that fund to create capital gains loss to offset the gains when sold..She is insisting that would not be legal. Wondering .. Any IRs gurus here..Sir .It is possible I mistated my question I am not moving it in the same fund that would not make sense .First My wife tells me that all tax brackets in capital gains are taxed at 15% correct ?I am presently in an evevated tax bracketin the tens of thousands monthybut less than one mill.annual .sennario Dems takeover in 08 They will increase it to 35% flat. My suggestion was a separate trust enity in 3 names where I would sell into it valuable real estate at noninal prices to have a capital loss for to offsettax gain OK explanation say 500.000real estate sold to trust for 10,000 doIhave a capital loss of 490,000?this is whereI am coming from Issue will be resolvedby 08 . but I want rebuttal points on thismatter prefferably Pro Me.Its a gender thing My mind and efforts are elsewhere..Thank You Very Much Greatly Appreciated..Sir..I may have mistated my question. It would not make sense to move it in the same fund ,I agree. my rebuttal wasto set up a separate fund similar to aLiving Trust( but not exactly) whereasI would sell say a valued piece of 500.000 real estate to the fund for 10,000would I have a tax loss of 490,ooo?It is ovious the dems are going to get inWe concur the present flat tax of 15%will be increased to 35% flat after 08My idea is that stock has tripeledin 3 years .Wow 20 tears from now..Where May it be?the issue will be resolved by 08 I need help for rebbuttalpointsI am really getting ticked with my answers ok so I will be blunt I am aware of every reply stated. I know about 15 %changing in 08 If dems are in it will not stay there Ok Dummy corporation to create a tax loss. sell real estate at aloss to offset sale gains legal or notperiod. plain and simple

[Mathew]

Moving funds around with in a given fund will have no tax consequences due to those moves. Intentionally creating a loss to avoid tax is not illegal, just not very bright. If you pay tax at the 15% rate or the 30% rate you still have the remainder (85 or 70 %) to use as you see fit. If you create a loss you you have 0% as a remainder.

[nithyas]

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[HankRoitmanEA]

Wow, for a guy who makes a $million or so per year, you sure are hard to understand!!First, the 15% LT cap gains rate is already going away on 12/31/08 regardless of which party is in power. It will revert to the 20% rate, not 35%. I wish I had your crystal ball as to who will do what in the future.Also, I have no clue what you mean by "keeping it long term." if it's already LT, it stays LT till sold. Long term means that you have owned it for more than 1 year.Now, moving anything into a trust, whether prop. that now appears to have a gain or loss will do nothing to reduce tax. This is so because the cost basis does not change. There is no gain or loss realized until a sale occurs, so it des not matter who owns the Pru or the real estate. You can sell Pru at a gain, but unless you sell the real estate ( or other asset) at a loss in the same year there is no offset.Look at the big picture.... does holding the Pru make more sense than selling it and paying tax on the gain?That's a much simpler question than the herky-jerk move you're suggesting (which will not make a nickel's difference in tax). Unless your crystal ball is clearer than everybody else's.Good luck