Capital Gains on Small Businesses????

[Jiggers]

This is not a political statement, and it is not meant to be a string on any political candidate. So please don't let it get that way.

One candidate says that he is going to eliminate the capital gains on small businesses?

What is that?

The only time that there is or could be capital gains on a small business, or for any business, is when you sell the business.

Or am I missing something. This "Yankee" is a bit thick-headed and need some help on this one.

[BOB W]

Everytime I hear it> I just shake my head at the public and media's stupidity....for not picking up on this. Jiggers> glad to hear you picked up on this too.

Next they will be saying> "we will lower capital gaines to ordinary income" and everyone will think that it will be great.......

[JoshinNC]

I have a copy of "this candidates" "tax proposal" (ha!)

This is not a political statement, and it is not meant to be a string on any political candidate. So please don't let it get that way.

One candidate says that he is going to eliminate the capital gains on small businesses?

What is that?

The only time that there is or could be capital gains on a small business, or for any business, is when you sell the business.

Or am I missing something. This "Yankee" is a bit thick-headed and need some help on this one.

sitting on my desk in plain site. Every time a client mentions it we go through it page by page and I blow holes in it where possible. I don't know that I've changed anyone's mind about who they will vote for but at least I feel like I am spreading the truth, something that is sorely needed this year.

[BHoffman]

Need hearing aid?

Did anyone else hear that the increase on taxes for over $250k would be based on GROSS and not NET?

[JohnH]

I don't pay much attention to what they say they are going to do - I look at what they've done in the past to get a clue about how they will act in the future.

Problem is, based on that standard I don't like either one of them.

[Jesse]

Did anyone else hear that the increase on taxes for over $250k would be based on GROSS and not NET?

It's based on ADJUSTED Gross Income, based on form 1040. So this includes the NET income NOT Gross income.

What will be of greater consequences to my clients, which all of my small businesses have AGI less than $250,000, is if Income, FICA and medicare taxes are imposed on health insurance benefits. I don't understand why this is not considered "raising taxes".

[DaveO]

If this applies to S-Corps

Did anyone else hear that the increase on taxes for over $250k would be based on GROSS and not NET?

I can see some real trouble. In one of Obama's speechs he clearly said he would only raise taxes on those with REVENUES in excess of $250k.

[Jesse]

Whether you are looking at our current tax plan or the proposed tax plan of McCain or Obama the adjusted gross income is the starting point. A small business owner -whether through a sole proprietorship, partnership or S-corporation - the adjusted gross income includes your net income.

I'm not doubting that he clearly said revenue in one of his speeches, he should have said AGI - but I bet neither candidate even knows what AGI is. Someone else pointed out that the Obama tax plan clearly says "adjusted Gross Income", and they only see the Gross Income and they don't have a clue what the "adjusted" is.

JoshNC, what does your plan say?

[Jiggers]

But, what about.........

Capital Gains on Small Businesses?

Still no clue as to what this is.

[Jesse]

Capital Gains on Small Businesses?

Still no clue as to what this is.

My interpretation is he is proposing to eliminate all capital gains taxes on investments in small and start up firms. Again you have the candidates preaching and promising something they do not understand.

[joanmcq]

Does anyone have a direct quote on that?

All of the tax plans are gibberish. As tax czar, I bop them both on the head, and a swift kick in the butt for pandering, although when I heard of one of the candidates disparaging the other in a speech about wanting to 'spread the wealth around' but the crowd picked up and started chanting 'spread the wealth around' was pretty amusing as far as candidates and audiences having no clue.

[David1980]

Whether you are looking at our current tax plan or the proposed tax plan of McCain or Obama the adjusted gross income is the starting point. A small business owner -whether through a sole proprietorship, partnership or S-corporation - the adjusted gross income includes your net income.

I'm curious as to the effect McCain's health care plan would have on AGI. If you remove the exclusion for employer provided health care benefits that would increase AGI even with a credit, unless the credit magically shows up on the first page of the return.

Which in turn would phase people out of various other credits, increase the 2% and 7.5% on Sch A, and affect anything a higher AGI negatively would effect.

[S T]

Health Care Proposal

Wouldn't McCain's health care proposal also increase payroll taxes for FICA/Mcare? Seems like it would, if the health care is no longer pre tax, but after tax and a $5,000 credit below the line (which would only be on the tax return) not at the payroll level. I do think it is at the AGI level, but not at the payroll tax level.

Does anyone know if the employee loses his pre-tax dollars for health care?

And I have heard and read that the $5,000 credit goes directly to the insurance companies? Why is that?


So many questions

[veritas]

The details are few

in McCain's plan.

Essentially it looks like a complete change in the way health insurance is acquired. His plan says you can keep your employer provided insurance rather than buyng your own. My thoughts are that since employer provided insurance are then taxable employers would be less likely to provide it. Employees would probably negotiate higher wages in lieu of the health insurance which could be used in conjuction with the tax credit to buy portable insurance.

His plan would open up competition by allowing individuals to purchase their policy across state lines. Ostensibly this would lower premiums since you could shop in a state where fewer requirements are imposed on the insurance company. States would be encouraged to help the process because tax revenues could be collected on these premiums.

As a self employed person my family insurance costs about $6,500 net after tax savings. Under McCain's plan my insurance costs would be about the same paying the same premiums. It is very possible with more competition my family could save substantially.

I am not taking a position on this other than, why can't I buy health insurance from whomever?

Why do I have to pay for maternity care or mental health not to mention chiropractors or substance abuse? I want basic healthcare coverage for accidents and illness. If I want extras then the premiums increase. I resent very much my state mandating our health insurance.

[newbie]

I think you ask good questions but I also think there are too many variables.

Why do I have to pay for maternity care or mental health not to mention chiropractors or substance abuse?

You're correct, but there are many families that are not in top health condition, what about them?

It works for you, but what about families with pre-existing conditions. If my spouses employer drops coverage, our family would be in trouble. The cost for us would indeed be greater than the tax benefits. What if you are a young family and you loose insurance when your wife is about to have a baby? There is COBRA, but again I think the cost will outweigh the tax benefits. There are just too many variables.

Crossing state lines? I don't know. Because state laws differ, too many scams and fine lines to read? I really don't know.