Is there any strategy to postpone (from 2022 to 2023) long term capital gains from the sale of stocks (sold in 2022)? I owe a lot of capital gains this year and want to reduce or postpone the capital gain tax from 2022 to 2023 if possible (when I will not be selling any stocks).
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Unfortunately there are few ways to defer capital gains tax, for most stock sales, the tax is due on the capital gain in the year the gain was recognized. Capital gains are offset by capital losses, so if you had losses on some of the stock sales, you may reduce the capital gain. Also bear in mind that the tax rates on long term capital gains are different than ordinary income tax rates. For 2022 capital gains, the rates are:
Tax filing status | 0% rate | 15% rate | 20% rate |
---|---|---|---|
Single | Taxable income of up to $41,675 | $41,676 to $459,750 | Over $459,750 |
Married filing jointly | Taxable income of up to $83,350 | $83,351 to $517,200 | Over $517,200 |
Married filing separately | Taxable income of up to $41,675 | $41,676 to $459,750 | Over $459,750 |
Head of household | Taxable income of up to $55,800 | $55,801 to $488,500 | Over $488,500 |
Another option is to invest in a Qualified Opportunity Zone. A QOZ is an economically distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment.
You can find out more information here:
https://www.irs.gov/credits-deductions/opportunity-zones-frequently-asked-questions#general
since we are now in 2023 there really aren't any methods to postpone the tax on 2022 capital gains.
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