Thank you. I am trying to follow the terminology, as not an accountant.
I see on Form 4952, the following language,
"In general, qualified dividends and net capital gain from the disposition of property held for investment are excluded from investment income. But you can elect to include part or all of these amounts in investment income....The qualified dividends and net capital gain that you elect to include in investment income on line 4g aren’t eligible to be taxed at the qualified dividends or capital gains tax rates. You should consider the tax effect of using the qualified dividends and capital gains tax rates before making this election. Once made, the election can be revoked only with IRS consent."
I understand that by making the election to use investment interest expense to cover long-term capital gains would be disadvantageous if there is interest income that would otherwise be taxed at ordinary income rates. Beyond that, I see no disbenefit to applying the interest expense to fully cover taxes due on realized long-term capital gains.
If anyone agrees or knows if NY State matches federal tax treatment in this regard, there would seem to be no tax due whatseoever when making such an election.
November 15, 2024
11:18 AM
