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What Role Income Taxation Plays in the Investment Process?

Income Tax plays a very important role in the investment process as investors have to pay their fair share of taxes on the gains made in their investments.

The higher the taxes paid, the lower the amount remains with the investor to reinvest.

In the US, Long Term Capital Gains are generally taxed at a lower rate than Short Term Capital Gains and hence it becomes important for an investor to consider the timing of selling their stocks for a gain from a tax perspective.

Tax on Investments is a very complex area and it is always good to consult with a Financial Advisor when the sums involved are important or signifcant.


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