Yay! I just finished the family's tax returns for 2024, so I'm patting myself on the back. For each family member, I was able to come very close to maximizing their tax-free long-term capital gain. For example, one family member had earned income of slightly less than $30,000 with around $1,600 in qualified dividends. I had safely harvested another $27,000 of long-term capital gain for her in 2024 without any increase in her federal tax. (She got stuck with around $1,500 in tax on her earnings, but she did not owe a penny on the qualified dividends or capital gains.)
When I talk with family and friends about such techniques, their eyes usually glaze over. It seems that the tax code is not widely understood by the general population. Even an understanding of the benefits of custodial Roth IRAs for children seems beyond the comprehension of the average citizen. That is sad. But it makes me feel pretty good to have some skills that benefit my family. I'm not completely useless after all!
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Rob Adams
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