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The Truth About Cutting Your Investment and Retirement Taxes: The Essential Truths in 20 Minutes by S. Kay Bell

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TRUTH 1Capital gains rules and rates

You stuck to your investment plan, and it’s paid off. You now have a nice nest egg.

Now you need to make sure you don’t sabotage your portfolio by making moves that could produce costly tax consequences.

When you sell a capital asset, such as a stock, piece of real estate, or any other investment holding, the difference between your asset’s basis (its initial cost plus other expenses incurred while you owned it) and the amount you sell it for, will give you a capital gain or a capital loss.

Although a loss can sometimes be useful (more on this circumstance in Truth 2, “How bad investments can pay off”), the goal is to come away with a gain. And timing your sale, when possible, can determine whether your gain ...

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