Exactly... so I am wondering if my increasing ETH dollar value is really just remaining flat.
Exactly... so I am wondering if my increasing ETH dollar value is really just remaining flat.
So it's my understanding that capital gains is not due until the sale of an asset right? So your worksheet showing compound interest is somewhat flawed. Because all the GAINS would all be the same rate of return if invested equally, then the capital gains would be at the end assuming that you sold off all at the same time and other conditions were equal.
So lets say you made 2,000,000 in your example, according to https://smartasset.com/investing/capital-gains-tax-calculator#t95lhznBndit appears that with an annual income of "0" you'd owe $535,229.
If you made, let's say, I dunno, the 10,000,000 per year max the calculator allows (https://smartasset.com/investing/capital-gains-tax-calculator#58g6MTkpoY) then it looks like $574,560.
So effectively it's 40k difference between top and bottom.
Stop using the crazy numbers. lol
This example looks like the current long term capital gains tax rate or around 20%, double that and if you made $2,000,000 you'll be taxed at around $1,000,000. Short term is different, I believe treated as ordinary income.
The issue is taxes will be paid on the gains when they are recognized. If you trade stocks, you will be taxed with every trade, even if reinvesting your earnings. Value and purchasing power will be lost with every trade by the amount of the tax. It is uncommon to see higher investment return rates with one stock investment, although companies like Amazon have been a good ride. Most people will trade stocks not just sit in one. Unless they invest in a mutual fund and just ride it out, which is probably the best way to invest for most people.
Something like an S&P index fund.
Capital gains on real estate is different. I am not sure what the limits are, but if you trade houses you live in and make money each time, you can roll your earnings into the next house and not owe taxes immediately. That makes real estate more tax advantageous that the stock market.
This example looks like the current long term capital gains tax rate or around 20%, double that and if you made $2,000,000 you'll be taxed at around $1,000,000. Short term is different, I believe treated as ordinary income.
The issue is taxes will be paid on the gains when they are recognized. If you trade stocks, you will be taxed with every trade, even if reinvesting your earnings. Value and purchasing power will be lost with every trade by the amount of the tax. It is uncommon to see higher investment return rates with one stock investment, although companies like Amazon have been a good ride. Most people will trade stocks not just sit in one. Unless they invest in a mutual fund and just ride it out, which is probably the best way to invest for most people.
Something like an S&P index fund.
Capital gains on real estate is different. I am not sure what the limits are, but if you trade houses you live in and make money each time, you can roll your earnings into the next house and not owe taxes immediately. That makes real estate more tax advantageous that the stock market.
As long as you live in that house for 2 years, is my understanding. This changes sometimes every few years, depending on administrations and Congressional windblowing/bloviation, etc.
Stop using crazy numbers? I literally went based on your numbers. If anything I scaled back. Look at your sheet, where the top end after 35 years is 2.9 million.
Your sheet show compound interest. You park money somewhere, walk away, have a consistent return. In your example, you never accounted for trades and rebalancing. So quit changing the rules of your own example to suit yourself when corrected.
Again, assuming that from your sheet cell G23 that your realized 2 million in value over 33 years at 20% interest, then the question is "How much tax" is owed. Using the calculator as linked about the amount of tax owed depends on income, and my point is that the spread between the top and the bottom of the brackets is still only 40k if one trusts that calculator.
This really only affects the Elon Musks and Warren Buffets of the world, that have far more money than I do, and are taxed at a lower rate. Since most of their gains are via stock, and if you just hold on long enough you pay the capitol gains rate. Seems to me that capitol gains rate should be progressive too like the income taxes. Not just a set rate for everyone.
https://www.pilotonline.com/inside-business/article_18c0e483-e300-5d4e-b795-47055bb7e79d.html
but that Warren Buffet guy doesn't know anything about wealth, taxes, capital gains, etc...
but that Warren Buffet guy doesn't know anything about wealth, taxes, capital gains, etc...
Not buying the progressive tax model. Flat tax makes the most sense to me. Everybody should have skin in the game. Half the country doesn’t pay federal income tax, so why wouldn’t they want someone else to fund the govt?
Why?
So people in middle class, etc can pay 20% instead of 39%
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