As I understand, the capital gains rate for 2008 will be 0% where it used to be 5%. Does it then jump to 15%? How is everyone doing planning for their clients? I have several clients with cap gains sales and I would like to give a ballpark figure on taxes. Any suggestions?
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Governed by general rate
JenMo, appears this 0% rate is effective so long as the taxpayer's incremental rate stays at 15% or below.
I lost some significant tax planning opportunities because I believed the 0% rates was a colossal government mistake and would not survive in 2008, especially when they were looking for revenue to replace the AMT rescission.
But here it is, 2008 and the break is still here, and schedule to remain until 2010. -
Confirmation 0% rate applies to AMT
In the edition of IRS Publ. 553 which shows 2008 tax changes, it does explicitly say that the 0% capital gains rate applies to AMT also.Comment
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Question
So this 0% applied to people in the 15% bracket and lower.
Is there any change to people in 25% tax bracket?Comment
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Nope
Those in the 25% bracket, go straight to 15%...As far as my clients go, there are few that will qualify for the entire benefit of the 0% rate...Remember that the inclusion of the net gain from Cap Gains goes into the income before the rates are applied, bumping many of my clients to the 15% rate, with a small (maybe) amount going at 0%...Comment
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