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Updated about 8 years ago on . Most recent reply
Adventures in Capital Gains
Hello everyone (Namely my tax gurus),
I'm sure you are aware that in the stock market there are two main categories for investors as it pertains to capital gains.
1. Long Term - not cashing out the investment until a year or more
2. Short Term - Cashing out an investment before a year has passed.
You can save a tremendous amount at tax time as a long term investor over being a short term investor. Almost half taxes.
I have a few rental properties. A property management company manages them and sends me monthly checks. Question: Could I save money in the same way by requesting my checks come in yearly?
I probably wouldn't do this as a strategy, but it does have me curious. Thanks for any replies given :)
Most Popular Reply
Generally, capital gains are not treated as income in the sense of monies coming in from rent, W2 or self employment or even interest/dividends. So there is no "long term income" (I shall not touch upon the treatment of qualified dividends). This alone should answer your question. ;-)
Adding to it: you pay your taxes on an annual basis which equals a calendar year (at least as a private person). So it doesn't matter if all your taxable income gets paid to you on the 20th of January or on the 28th of December or somehow spread over that period.