Matching Like Capital Gains, Losses Can Trim Taxes

Dave was quoted in a recent article by Dow Jones writer Daisy Maxey devoted to the virtues of preserving short-term losses for use in offsetting short-term gains (as opposed to “wasting” them offsetting long-term gains).  Dave’s comments were more focused on the possibility of harvesting all embedded gains, in light of looming tax law changes:

David Yeske, managing director at financial planner Yeske Buie in Vienna, Va., said that this year and last he was “very aggressive” about harvesting gains to lock in the current long-term gains rate. That will likely dominate his thinking next year, too, he said. With the prospect of the Bush tax cuts expiring at the end of next year, the federal long-term capital gains rate may go up for most taxpayers by a third, “a serious bump,” says Yeske.

“We’re far less concerned with harvesting losses and more concerned with when and how we’re going to harvest long-term gains,” he said. “Most of our people are sitting on embedded gains, notwithstanding the craziness of the last six months. We think resetting the cost basis higher at a low tax rate is going to make sense for our clients in the long run.”