The AMT, capital gains and losses

By Steve Savant

Ash Brokerage Corporation

The alternative minimum tax (AMT) was invented by an imaginative group of legislators attempting to capture wealthy Americans, who, through artful and tactical tax planning, were legally paying little to no tax. But the AMT was never inflation-adjusted, and as inflation increased earnings, many middle class taxpayers were being trapped in a rich man’s progressive tax. Finally, after decades of middle class entrapment, the AMT was recently changed and is adjusted for inflation going forward.

Another area of attention is long-term capital gains and losses. Many skilled investors as well as accountants try to offset capital gains against capital losses at the end of the year to reduce exposure to capital gains taxation. But sometimes capital losses exceed gains, and the IRS limits those losses to $3,000 a year until they are recovered.

Steve and Ken bring you up to speed on the AMT, capital gains and losses with strategies that can help you minimize your tax liability.