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Thread: Capital gains tax and tax averaging

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    Capital gains tax and tax averaging

    Capital gains taxand tax averaging methods for reducing taxable incomes.

    Profitsdue to the sale of anything owned by the seller for at least the fullyear prior to the sales transaction are granted extraordinary andunjustified tax reductions for their long term capital gainincomes.

    I do not argue that incomes of those who continuouslyreinvest into and strive to nurture their enterprises are MORE worthybut they are CERTAINLY NOT LESS economically worthy than those whochoose to “take the money and run”.

    The lesser tax ratesgranted to commercial capital gains reduce federal revenues andincreases our budget’s deficits.
    (It's politically unfeasibleto eliminate this consideration for taxpayers' selling their primaryresidence).
    The IRS tax option of income averaging was onceavailable to all taxpayers that experienced ANY financialboon.

    Income averaging enabled a taxpayer to divide theirtaxable income over three year duration and pay taxes based uponthose updated annual taxable incomes. Income averaging mitigated thehigher tax due to progressive income tax rates. I believe it’sstill an option available only to agriculture, ranching or fishingenterprises. It’s an advantage to those with erratic annual taxableincomes.

    I think it then required the taxpayer’s net incomefor the last tax year be 20% greater than that of the previous taxyear and some specific foreign incomes were not averaged out.
    Exceptfor those exclusions, the government made no other determination asto what source of income should be favored. The income averaging formdid fully consider regulations or tax rate differences that may havechanged during the years of incomes being averaged.

    Unlikethe tax reduction for long term capital gains, income averagingequally treated lottery winners, speculators, investors and homesellers. Government did not determine winners and losers.

    Iadvocate that income averaging should be fully reinstated and replacethe favorable treatment of long term capital gains. I would not beadverse to it being extended to average out 5 rather than the 3years.

    Respectfully, Supposn


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    Didn't you already make a thread on this?

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    Quote Originally Posted by Spookycolt View Post
    Didn't you already make a thread on this?
    SpookyColt, thread Republican tax reform is devoted to discussion of H.R. 1, “tax cuts and jobs act”, (i.e. the Republican proposed tax reforms).

    I opened the topic while awaiting the U.S. Congresses Joint Committee on Taxation to release their estimates of the proposed “tax cuts & jobs” act's individual items' impacts would be upon our federal budgets over the next decade. They finally did so on November 2, 2017.

    I had did expect “income averaging”would NOT be an item mentioned in the bill. I posted my regrets that it was not likely mentioned within the committee.

    Respectfully, Supposn

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