Federal Income Taxes

by Coldwell Banker Evergreen Olympic Realty, Inc. on November 17, 2010

As you are no doubt aware, the tax cuts that were put in place early last decade are set to expire at the end of this year. Among other things, the tax cuts brought the tax on longterm capital gains down to 15%. Without an extension, rates would revert back to 20%. However, there had even been discussion about moving that rate even higher.

This was one of the big issues leading up to the election. Prior to the election Congress and the Administration looked poised to let the cuts expire or at least limit the extension of the cuts to certain income brackets.

With the election results in, it is anyone’s bet what will happen. Keep a close eye on this issue. If the lame duck Congress does not act before the next Congress is sworn in, it will take a bill with retroactive application to ensure the cuts remain without a break. With a divided Congress that will not be an easy task.

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