Joseph Perry, Firmwide Partner-in-Charge, Tax & Business Services, Featured in Long Island Business News Article, "Tax Strategies in a Bull Market."
Long Island Business News
By Kristen D'Andrea
Excerpt:
The recent run-up of the stock market has created both an opportunity and need for tax strategizing. Varying yield scenarios and tax implications unique to a bull market can and should affect investors’ decisions. Industry insiders, however, caution investors not to let the tax tail wag the dog.
“You have to make sure you’re effectively looking at the economics of your investment and their factor on taxes, not the other way around,” said Joseph Perry, firm-wide partner-in-charge of tax and business services for Marcum in Melville.
The current bull market has created some unique situations, however. For instance, in a run-up, many people in the market consider taking their gains and reinvesting. What they should take into account, Perry said, is the tax effect in selling the stock and how that will play into their yield going forward.
For example, an individual who invested $10,000 in a stock that then doubled would have a $10,000 gain. If the stock was sold, the individual would be required to pay $3,080, or approximately 30 percent in taxes, comprising capital gains of 23.8 percent, plus a state rate of 7 percent, leaving about $17,000 to be reinvested, Perry said. If the investment was originally earning a 3 percent dividend, the individual would have to find a new stock yielding 3.6 percent in order to get an equivalent return, he said.
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