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Retirement Planning/Long Term Capital Gains & Taxation

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Question
I owe the state of Illinois a considerable amount for year 2013.  I just need a brief explanation to understand the reason why?

Most of my taxable income appears to have resulted from long term capital gains on NON-IRA investments.  Were those "taxable" long term capital gains a direct result of my switching investment brokers in mid 2013, which necessitated selling the proprietary NON-IRA investments in order to make them transferable to the new broker OR did all these taxable long term gains result for a different reason?

Thank you,
Ken

Answer
That is very credible question to ask your stock broker directly.

If they were stocks, then the broker could have requested stock certificates and delivered those to you as a withdrawal from his brokerage, and you could have taken those certs to the new broker and deposited them.

Most other types of investments should have had a similar method to avoid forcing a sale and repurchase.

Many investments are "marked to market" which means you are responsible to pay taxes at the end of the tax year on the net change in the account on those investments whether sold or not.

The Federal long term cap gain rate for the highest of incomes in the US bumped from 15% to 20% in 2013, so 2012 might have been a better year to experience that gain (assuming the Illinois rate remained the same). However the long term cap gain rates in 2013 were still very low, historically speaking. So if it was converted this year it very well could have been more.

If you paid no Federal taxes on those gains then it probably does seem the State of Illinois took a big chunk out of your account.

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Richard Fritzler

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We do not sell insurance, we are not money managers. Our programs allow you to make any investment and pay a far lower tax. Whatever your plan, you will be more successful, by drastically lowering the taxes that are owed. Your retirement will grow faster.

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I have been in the business of assisting business owners in reducing their taxes and liability for over 17 years. Providing retirement option that are not just tax defered, and not limited to a "token" tax free contribution. Retirement plans that allow for total and complete access before you are 59.5 with no penalties.

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National Small Business Owners Association.
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Contributing author to "The Corporate Standard Newsletter".


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I have been in the business of assisting business owners in reducing their taxes and liability for over 17 years. Providing retirement option that are not just tax defered, and not limited to a "token" tax free contribution. Retirement plans that allow for total and complete access before you are 59.5 with no penalties

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