February 2024

Chris Rock once remarked, “You don’t pay taxes – they take taxes.” That applies not only to income but also to capital gains.

Capital gains result when an individual sells an investment for an amount greater than their purchase price. Capital gains are categorized as short-term gains (a gain realized on an asset held one year or less) or long-term gains (a gain realized on an asset held longer than one year).

Keep in mind that the information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation.

Long-Term vs. Short-Term Gains

Short-term capital gains are taxed at ordinary income tax rates. Long-term capital gains are taxed according to different ranges (shown below).1

Long Term Capital Gains Tax Brackets (for 2024)

Tax Bracket/Rate        Single              Married Filing Jointly               Head of Household

0%                                         $0 – $47,025                                     $0 – $94,050                                    $0 – $63,000
15%                               $47,026 – $518,900                       $94,051 – $583,750                        $63,001 – $551,350
20%                                      $518,900+                                          $583,750+                                          $551,350+

It should also be noted that taxpayers whose adjusted gross income is more than $200,000 (single filers or heads of household) or $250,000 (joint filers) may be subject to an additional 3.8% tax as a net investment income tax.2

Also, keep in mind that the long-term capital gains rate for collectibles and precious metals remains at a maximum of 28%.3

Rules for Capital Losses

Capital losses may be used to offset capital gains. If the losses exceed the gains, up to $3,000 of those losses may be used to offset the taxes on other kinds of income. Should you have more than $3,000 in such capital losses, you may be able to carry the losses forward. You can continue to carry forward these losses until such time that future realized gains exhaust them. Under current law, the ability to carry these losses forward is lost only on death.4

Finally, for some assets, the calculation of a capital gain or loss may not be as simple and straightforward as it sounds. As with any matter dealing with taxes, individuals are encouraged to seek the counsel of a tax professional before making any tax-related decisions.

If you have questions about your finances, take advantage of American Wealth Management’s 1- hour no-cost financial consultations. Submit this form to us and we will contact you to schedule a video call with one of our advisors.

American Wealth Management Reno, Nevada

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1. IRS.gov, 2024
2. IRS.gov, 2024
3. Investopedia.com, November 28, 2023
4. IRS.gov, 2024

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory
firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2024 FMG Suite.

Investment advice offered through American Wealth Management (“AWM”), a SEC-registered investment adviser. Certain personnel of AWM may also be registered representatives of M.S. Howells & Co. (“MSH”), Member FINRA/SIPC, a registered broker-dealer, and therefore, may offer securities through MSH. AWM and MSH are not affiliated entities. M.S Howells does not provide tax or legal advice. Please consult your legal or tax advisor regarding your individual situation.

We collect a lot of stuff in life. Maybe it’s cash, debts, properties, investments, or solid oak furniture from the Turn of the Century. Whatever it is, as you age, you likely have a long list of items to your name.

And the longer you live, the more complex that list becomes. It’s natural to wonder if you’re doing everything you can to be a wise steward of all your stuff.

What you need is guidance to help you manage your assets well, but you’re not sure if hiring help is the right move.

Should You Hire a Wealth Manager?

Wealth managers are there to help you make informed decisions about your finances. It’s in their best interest to help you grow your wealth, become debt-free, and move toward financial peace.

They do that by educating their clients about financial tools and investment strategies that match their risk tolerance.

Consider the following questions:

• Do you know your net worth? In the maze of chutes and ladders—assets and liabilities— are you in the positive?
• Should you hang on to an investment you made 30 years ago that hasn’t paid dividends in a while?
• What’s the plan for all of your stuff after you’re gone?

If any of these felt relevant to you (or you answered “unsure” to any of them), a wealth manager’s expertise could be just what you need!

Here’s how hiring a wealth manager can help you stay on top of your finances and prevent valuable assets from falling through the cracks.

Wealth Managers Help Build Your Financial Roadmap

So what is a wealth manager, and what does one do?

You’ve probably heard wealth managers referred to by a lot of different names: CFP® (Certified Financial Planners), CFA® (Chartered Financial Analyst), investment advisors, portfolio managers, etc. But what these professionals all have in common is that they see the big picture of your finances.

Wealth managers use their expertise in investments, tax law, and financial tools to help you grow and optimize your assets. So you can feel peace of mind about your finances.

In a way, wealth managers are like trail guides—there to help you reach your goals and avoid financial pitfalls. Wealth managers can understand your short-term and long-term ambitions in the context of where you are currently, and make a plan to help you achieve those goals.

Wealth Managers Help You Manage Financial Risk

Intimidated by the stock market? Wealth managers can help you navigate investing according to your risk tolerance. In other words, you can explore buying and trading stocks with someone who will alert you of high-risk maneuvers and recommend strategies aligned with your desired level of financial safety.

Is all of your money kept in one place? Is it leaving you vulnerable? Wealth managers can help you create a diversified portfolio, which acts as a counterbalance to an ever-changing marketplace. Wealth managers can suggest investments that make sense for your situation and are aligned with your long- and short-term goals. So you can feel more secure knowing your eggs aren’t all in one basket and your funds will be available when you need them to be.

In effect, a wealth manager’s personalized service can give you a level of stability that goes far beyond individual investments and keeps your assets safe from inflation.

Wealth Managers Help You Optimize Your Tax Strategy

Now, let’s talk about taxes.

Wealth managers are adept at navigating tax law to make sure you’re taking advantage of every possible deduction. Wealth managers understand that money the government takes unnecessarily (the dollars that come back to you in your tax return) can be put to better use in retirement accounts or other investments than as a free loan to Uncle Sam.

By helping you keep more of your money, wealth managers help you save substantially over time. They can also help you turn around and invest what you save so that your money is working for you by generating interest.

Truly, the benefits of your wealth manager’s tax knowledge alone often offset the cost of their services.

Wealth Managers Help You Save Time and Stress

Life is busy, and managing your wealth can be time-consuming. On our fast-paced planet, every second of your time has a price on it. (Why do you think companies pay so much for well-placed online ads?) Your time is valuable.

By entrusting a professional financial advisor, you free up your time while reducing the stress associated with financial decision-making. It’s an investment in your financial confidence and overall well-being.

It helps to look at the cost of wealth management as an investment rather than an expense. The long-term value and potential returns will likely outweigh the initial financial outlay.

The Final Cost-Benefit Analysis

Hiring a wealth manager is not just about protecting what you’ve earned; it’s about growing your wealth and improving your quality of life today.

The cost associated with wealth management isn’t merely an expense; it’s a strategic investment in a plan that aligns with your goals, whether that be getting out of debt or preparing for retirement.

It’s not an off-the-shelf solution, but a bespoke framework designed with your financial future in mind.

Talk with a Wealth Manager in Reno, Nevada Today

American Wealth Management is a financial management firm in Reno, Nevada, that serves many local clients as well as individuals across the country.

If you have questions about your finances, take advantage of American Wealth Management’s 1-hour no-cost financial consultations and talk one-on-one with one of our financial advisors, we’ll seek to understand your financial goals and explain exactly what we can do to help you along the way.

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Investment advice offered through American Wealth Management (“AWM”), a SEC-registered investment adviser. Certain personnel of AWM may also be registered representatives of M.S. Howells & Co. (“MSH”), Member FINRA/SIPC, a registered broker-dealer, and therefore, may offer securities through MSH. AWM and MSH are not affiliated entities. M.S Howells does not provide tax or legal advice. Please consult your legal or tax advisor regarding your individual situation.