Zeev's Turnips Patch-No Politics (ZEEV)

[MONYMAN3]

Zeev, I believe the following applies to regular equities since the tax law changes made effective on May 6, 2003:

"The law also includes special rates for property held more than five years, but these rates are now superseded by the 5% and 15% rates."

In addition, under the prior law (as best I can recollect)effective in 2001 required the taxpayer to make a "deemed sale" of his/her gains, pay the taxes on that constructive sale, and then and only then would the 5 year time period start to run. Assets held before the 5 year law was passed and not "deemed sold" could not be considered for the 5 year preferential cap gains treatment. Of course assets purchased prospectively after the enactment of the 5 year rule would qualify if 5 years have passed prior to May 6, 2003 (which if you note the effective dates is impossible therefore negating any use of the 5 year rule now anyway) Under the 5 year rule, taxpayers in the 15% marginal tax bracket who did hold an asset for 5 years or more could avail themselves of a 8% long term capital gains rate (down from their normal l/t capital gains rate of 10%) Taxpayers who's marginal tax rates were higher than 15% (for assets acquired after 2000 or "deemed sold" on you 2001 return) could apply an 18% long term capital gains rate on those particular assets.

FWIW
Rob