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Rule for Building Wealth: Defer Taxes

This article was written by in Investing, Taxes. 2 comments.


Fortune Magazine’s tenth rule for building wealth is appropriate as the end of the year approaches. The magazine suggests taking advantage of a tax rule that lets investors deduct $3,000 of a realized loss from any realized gains. Since you are taxed 15% on realized gains from stocks, bonds and mutual funds held for at least a year, taking this deduction can reduce the total tax bill.

There is complete information about the capital gains tax on SmartMoney.com.

This rule won’t work for me. Almost all of my investments are in retirement accounts, tax deferred or tax free. In my non-tax deferred accounts, all of my investments have appreciated since the beginning of the year, and I haven’t sold any investments. I’ll be looking for other ways to reduce my taxes.

Published or updated December 21, 2006. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 2 comments… read them below or add one }

avatar thc

Flexo: The Fortune Magazine link is a little misleading. There is not limit to long-term losses that you can net against long-term gains. You can, however, deduct losses from ordinary income, up to $3000, if you don’t have gains to net them against. It’s an important distinction since most of use pay a much higher tax rate on ordinary income than on long-term capital gains.

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avatar Sun

Merry Christmas!

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