The new capital gains tax policy, effective from June 25, 2024, brings significant changes for individual investors, corporations, and trusts. This new policy imposes a higher tax rate on earnings from the sale of assets, like stocks or investment properties, also known as capital gains.
Capital Gains Inclusion Rate Changes
- Individual Investors: Previously, individual capital gains exceeding $250,000 were taxed at a rate of 50%. However, under the new policy, these gains will now be subject to a higher tax rate of 66.67%. It’s important to note that this increased rate only applies to gains earned after the initial $250,000. The first $250,000 of gains within a tax year will still be taxed at the original rate of 50%.
- Corporations and trusts: Corporations and trusts, unlike individual investors, will not benefit from the lower rate on the first $250,000 of annual capital gains. Instead, they will be subject to the higher tax rate of 66.67% right from the first dollar of gains.
The increase in the capital gains tax inclusion rate will have various implications depending on your situation. For example, the new policy may affect the timing of your investment sales, as well as the types of assets you choose to invest in. It’s important for you to understand how these changes will impact your overall tax liability and to plan accordingly.
Contact Us
If you have concerns about the new policy’s impact on your investments, we are here to help. Our team at Rothenberg Wealth Management provides free, professional advice and guidance. Our advisors can help you navigate the intricacies of the new capital gains tax landscape, understand the specifics of the policy, assess your current investment portfolio, and develop a plan to minimize your tax liability.
