Understanding Capital Gains Tax Strategies | Cody Garrett | Ep 517

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Brad Barrett | Choose FI Media

Financialindependence, Investing, Firemovement, Passiveincome, Frugalliving, Personalfinancepodcast, Daveramsey, Careers, Business, Earlyretirement, Habits

4.8 • 5K Ratings

🗓️ 21 October 2024

⏱️ 54 minutes

🔗️ Recording | iTunes | RSS

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Summary

Maximize Your Wealth: Understanding Capital Gains Tax Strategies | With Cody Garrett

This episode dives into the strategy of capital gains harvesting, explaining how it can help individuals minimize taxes on investments and potentially realize tax-free income. We break down how this approach fits into financial independence planning, including key comparisons between capital gains and ordinary income, real-life scenarios, and important health insurance considerations for early retirement.

What strategies can you use to reduce your tax burden during retirement?
How can understanding capital gains impact your long-term financial decisions?
What role does income management play in health insurance planning for early retirement?

Chapter Markers:

[00:00:00] Introduction to Capital Gains Harvesting
[00:01:38] Understanding Income Tax and Capital Gains
[00:05:22] Tax Rate Comparisons: Ordinary vs. Capital Gains
[00:20:07] Real-Life Case Studies
[00:49:34] Key Takeaways and Best Practices

Key Takeaways:

Understand your capital gains tax rates to optimize when to sell investments.
Use capital gains harvesting to realize profits without tax penalties.
Plan retirement income carefully to maintain eligibility for health insurance subsidies.

Links & Resources:

Transcript

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0:00.0	Hello and welcome to Choose a Phi. Today in the show, we have another deep dive on a really
0:05.4	fascinating topic, which is capital gains harvesting. So tax gain harvesting, in essence.
0:12.0	And we first talked about this way back in April of 2017 in episode 18R. And this is one of our
0:20.5	most downloaded episodes of all time.
0:22.6	And frankly, we just covered it in passing.
0:25.3	We didn't even give it our full in-depth analysis, but that changes today.
0:29.0	So I asked my good friend Cody Garrett, who's a CFP from the website Measure Twice
0:33.9	Money.
0:34.2	He was recently on in our first of these fund deep dives in episode 503,
0:39.7	where we talked about the Roth IRA conversion ladder, which is yet another one of those
0:44.1	fundamental financial independence strategies that can really help us. And I think capital gains
0:49.7	harvesting that we're going to talk about today is one of the most fascinating things where
0:54.1	there is this way to essentially get free money. today is one of the most fascinating things where there's this
0:55.2	way to essentially get free money. So tax-free capital gains. And it's actually much more
1:03.4	significant than you would otherwise anticipate. I wrote about this in my newsletter in July and
1:08.6	August and there was such interest that I knew I had to put
1:11.7	an entire episode together, and that is today. So without further ado, you're really going to
1:17.4	enjoy this. Get a pen and paper, and this one is really going to be valuable that I can assure you.
1:23.3	With that, welcome to TruthZuFi.
1:34.4	Cody, this is going to be fun.
1:37.2	I've been looking forward to this since the second we scheduled it.
1:37.9	This is going to be great.
	...

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