Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Chuzzlewit who wrote (39733)	4/30/1998 8:36:00 PM
From: Geoff Nunn	Read Replies (1) \| Respond to of 176388

Paul, that was a nice little exercise illustrating the tax benefits of buy and hold. If state taxes are applicable the case for B&H is even stronger. Those of us living in Calif pay a maximum state tax of 9.3%. This rate applies to couples filing jointly with a taxable income of $65,832 or over. In this bracket you would pay 9.3% on cap. gains, which are taxed the same way as other forms of income. Using your example, a B&H strategy that returns 20% per yr. pre-tax would yield 16.24% after taxes (assuming a state cap gains rate of 9.3%). In contrast, the trader would reap only 12.54% per year. This means that B&H, which does 25.3% better than trading when only federal taxes are considered, does 29.5% better when Calif's top rate is added. Unless Lee happens to live in a state like Washington, I would suggest he study these numbers not yours. <vbg> Regards, Geoff