Tax Considerations: Rapid Fire

What this video covers

• Why one year plus one day is the magic holding-period threshold that separates 37% ordinary income taxation from the 0%, 15%, or 20% preferential long-term capital gains rate
• How qualified dividends share those same preferential rates, and why real estate investment trust (REIT) dividends and master limited partnership (MLP) distributions fail to qualify
• The exact mechanics of tax-loss harvesting: unlimited offset of capital gains, then the $3,000 annual limit against ordinary income ($1,500 married filing separately), with indefinite carryforward of excess losses
• Why a wash-sale loss is deferred rather than lost, and how the disallowed amount is added to the replacement security's cost basis within the 61-day window
• The step-up in basis at death versus carryover basis on gifts, including the memory aid that death deletes embedded gains while gifts grandfather the donor's original basis
• When the 3.8% net investment income tax (NIIT) surtax applies, and how it produces a 23.8% maximum effective rate on long-term gains for high-income filers
• The two prime alternative minimum tax (AMT) triggers, incentive stock option (ISO) exercises and private activity municipal bond interest, and why the taxpayer pays the greater of regular tax or AMT at 26% or 28%