Jersey City, NJ Tax Lawyers

Apart from real estate investments, business assets that you own can also be assessed for capital gains tax in the event of them being sold for more than the purchase price. While the value of the business assets may increase during the period of ownership, capital gains tax is only applicable after the sale of the property or asset, say exemplary tax lawyers in Jersey City, NJ.

Timing is of the essence when it comes to capital gains. A large capital gain can be offset with a capital loss in order to ease your tax burden.

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Now no one wants to be in a tax burden and who knows what Efraim Diveroli (Jonah Hill) from the movie War Dogs did with all that cash he made in Iraq when he sold all those handguns to the military. The military was going to use those guns to hand over to local law enforcement in Iraq. Did Diveroli report these earnings to the IRS? Knowing him and going by his deceitful character, probably not!

Stock that is liquidated needs to be owned for one year in order to qualify for a lesser tax. It would be advisable to sell smaller assets and wait for a time when the business is financially sound to sell larger assets. Any inconvenience caused could be offset by paying lesser capital gains tax at the end of the financial year.

Classification of capital gains tax

  • Capitals gains tax is classified by the IRS as short-term (less than one year), and long-term (more than one year)
  • All business property that is sold within one year or less is considered as being liable for short term capital gains tax. Any gains from a short term capital asset are taxable at ordinary income tax rates. On the other hand, when business assets are sold after a year, any related gains are treated as long term capital gains, according to New Jersey tax attorneys.

Tax rate on capital gains

Capital gains tax rates were lowered by the Congress in 2003 from 20 to 15 percent for taxpayers that qualified for capital gains tax in an effort to help small businesses and boost overall economic growth. Many people wonder how come this tax exists at all when Americans are already taxed via their income. America fought against taxes so why does a certain sect of Americans choose to impose so many different kinds of taxes?


Taxes will soon be going down much to the happiness of the American worker.

The rate for the two lowest tax brackets is now at 0% in accordance with the Tax Reconciliation Act signed by President Bush in 2006. The capital gains rate also reduced from 28 percent to 20 percent in 1997. A cut in the capital gains tax rate resulted in an increase in capital gains realizations and tax paid.

The present qualifying tax brackets for long term capital gains are:

  • For taxpayers in the 10% or 15% bracket–0%
  • For taxpayers in higher brackets–15%
  • Tax on un-recaptured Sec. 1250 gain–25%
  • Capital gain rate on collectibles–28%

How capital gains affect businesses

In many companies, capital gains do not have a large effect on the daily operations. However, investment companies are affected since the issue of capital gains arises whenever an asset is bought or sold.

The United States has one of the highest capital gains tax rates in the world which is why so many jobs are overseas. To many, the tax is perceived to be unfair. One argument against this tax is that capital gains is not indexed for inflation and is considered an unfair penalty. The IRS allows businesses to defer capital gains tax through proper tax planning and sales methods, which are mooted by the government. The IRS though is about to be altered very soon since their practices have been immoral and corrupt.

If you have an issues with capital gains tax or need help with dealing with the IRS, all you need is to reach out to a New Jersey tax lawyer today to evaluate your situation. You can do so using If you have any questions, contact us. We will call you back shortly. We want to see you attain the legal help you deserve.