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The Water Cooler
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How many times did this happen under Obama leadership?
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<blockquote data-quote="Dave70968" data-source="post: 3191457" data-attributes="member: 13624"><p>Well, it's about half-true. Capital gains taxes are applied to the gains on stocks (price appreciation) held over a year, then sold. As soon as they're sold--realizing the gain--they become taxable, but they cease to be investments at that point, so there's no more "passive" income. In order to get them "producing" again, the money has to be used to purchase another investment, and that will only get into cap gains rates if the shares are held for over a year, so they're not liquid. Anything held less than a year is taxed at ordinary income rates.</p><p></p><p>Another possibility for "passive" income is dividends--that is, part of the company's profits distributed to the shareholders in proportion to their holdings. Receiving dividends doesn't divest the shareholders of their shares, so it really is "passive" income that can go on indefinitely. It, however, is also taxable as ordinary income. It's also subject to the corporation's income tax before it's distributed as diviends, thus resulting in double taxation (and the reason small companies choose to be taxed under subchapter S--so-called "S-corps"--rather than subchapter C).</p></blockquote><p></p>
[QUOTE="Dave70968, post: 3191457, member: 13624"] Well, it's about half-true. Capital gains taxes are applied to the gains on stocks (price appreciation) held over a year, then sold. As soon as they're sold--realizing the gain--they become taxable, but they cease to be investments at that point, so there's no more "passive" income. In order to get them "producing" again, the money has to be used to purchase another investment, and that will only get into cap gains rates if the shares are held for over a year, so they're not liquid. Anything held less than a year is taxed at ordinary income rates. Another possibility for "passive" income is dividends--that is, part of the company's profits distributed to the shareholders in proportion to their holdings. Receiving dividends doesn't divest the shareholders of their shares, so it really is "passive" income that can go on indefinitely. It, however, is also taxable as ordinary income. It's also subject to the corporation's income tax before it's distributed as diviends, thus resulting in double taxation (and the reason small companies choose to be taxed under subchapter S--so-called "S-corps"--rather than subchapter C). [/QUOTE]
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How many times did this happen under Obama leadership?
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