Nobody likes paying taxes on investments. But some lucky
taxpayers are able to get a 0% rate on some of their investment
In the following video, Dan Caplinger, The Motley Fool's
director of investment planning, runs through the rules for the
0% rate, explaining how it can apply to both long-term capital
gains and qualified dividend income. Dan notes that on the
dividend side, the rate only applies for ordinary stocks, with
certain pass-through entities like real-estate investment trusts
paying out dividends that get taxed at ordinary income tax rates.
Similarly, business development companies
, and Main Street Capital have traditionally paid out a
combination of qualified and non-qualified dividend income,
making their distributions only partially eligible for the 0%
rate. Dan concludes that if you have room in those lower two
brackets, selling stocks at a gain can be a smart move to make
the most of your tax-free opportunity.
Take advantage of this little-known government tax
Recent tax increases have affected nearly every American
taxpayer. But with the right planning, you can take steps to
take control of your taxes and potentially even lower your tax
bill. In our brand-new special report "
The IRS Is Daring You to Make This Investment
The IRS Is Daring You to Make This Investment Now!," you'll
learn about the simple strategy to take advantage of a
little-known IRS rule. Don't miss out on advice that could
help you cut taxes for decades to come.
Click here to learn more.
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