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How the NEW Federal Tax Code May Hurt or Help Your Finances!

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Uploaded on Feb 3, 2012

If you watched President Obama's annual State of the Union address on January 24th or have been following other presidential hopefuls as they campaign for November's election, you have probably heard the debate over the capital gains tax rate. The long term capital gains tax has been a hot topic in the media recently, mostly because there is a misconception about how long-term capital gains are actually taxed.

The capital gains tax is currently 15%, which means that an investor who held an investment made with after-taxed dollars for one year or longer is subject to a 15% tax rate on any earnings on that investment. If the investment losses money, and that loss is realized, the investor can only deduct up to $3,000 of loss on their tax returns. The lower tax rate is in place to encourage more people to invest in US companies and the economy.

Billionaire Warren Buffett, the subject of the "Buffett Rule" has been making the headlines lately as well. His so-called Buffet Rule would increase taxes, including capital gains taxes, to 30% on Americans earning a combined $1 million dollars or more per year. Ironically, Buffett makes a substantial part of his income off investment earnings taxed at the 15% rate. But Buffett also has not been leading by example since his company Berkshire Hathaway reportedly owes nearly $1 billion dollars in back taxes!

Tune it to this week's CBTV show to learn the truth about the long-term capital gains tax and find out how changing the federal tax code may hurt or help your finances!

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