end of year gain recognition strategy

[Guest cherzeca]

market is at its all time high, perhaps a good time to take some profits. should I do it before 1/1/21 or after?

 

we won't know if the senate is controlled by Rs until after 1/1/21, so we can't estimate the likelihood of an increase in marginal income tax/cap gain rates. will a 50-50 senate with a D tie breaking vote result in the kind of tax increase that Ds will want in any event? delaying until after 1/1/21 of course defers payment of taxes one year.

 

usually I dont like to let the tax tail wag the investment dog. just focusing on market analysis, I am beginning to think the market is discounting a very effective vaccine rollout, and to my mind there is a difference between effective vaccines, which we seem to be developing, and achieving population immunity.  so the market seems to be getting ahead of itself...we still have high unemployment, empty store fronts/office buildings etc....and yet there is often a honeymoon effect with a new potus early in the term.

 

or maybe I just do nothing...if nothing works, do nothing?

[Guest cherzeca]

"As for timing, any changes will likely be effective in 2022 or 2023, analysts say. While new tax rules can be made effective retroactively as long as they are adjustments to existing rules and not entirely new, the chances are slim that they’ll impact taxpayers next year, says Kate Barton, EY’s global vice chair of tax. “Let’s say there’s a 10% chance for 2021,” she says."

 

https://www.barrons.com/articles/joe-biden-wants-to-change-tax-policy-heres-what-he-might-accomplish-51606496735?mod=hp_LATEST