Author Topic: Why would cap gains not apply for Capital Gains Harvesting?  (Read 1872 times)

bimmerjeff

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Why would cap gains not apply for Capital Gains Harvesting?
« on: February 20, 2019, 09:38:10 AM »
Hey Jeremy,

Your last post you mentioned that instead of 100% Dividends you could split between some dividend income and some income from Cap Gains Harvesting and have less taxable income that way.  Both are taxed at 15%, I don't see the savings?  Can you explain this a bit further? Note, this assumes I am in a US residence, was your exaple for expats fully decoupled from the US?  Thanks!

Jeff

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Re: Why would cap gains not apply for Capital Gains Harvesting?
« Reply #1 on: February 20, 2019, 11:33:22 PM »
Hey Jeff

If I need $10,000 to spend, and I philosophically decide I can only spend dividends, then 100% of that $10k will be taxable income. By definition.

But if I'm OK selling some stock to get that $10k, then some of the stock sale is a non-taxable return of basis. If I have some stock that has appreciated 25% and I sell $10k of it, then I will have $2k of capital gain and $8k of basis.

See the chart in this post
https://www.gocurrycracker.com/long-term-long-term-capital-gains/