Most people are aware that there are steps you should consider to protect your assets from being liquidated to pay for long-term care. And to protect your heirs from the burden of heavy estate taxes upon your passing. However, are you aware of the related risks associated with the capital gains tax?
What is the capital gains tax?
The capital gains tax is levied on the profit you earn from the sale of an investment or property—referred to as a “capital asset.”. When you sell an asset that has appreciated, the capital gain is defined as the difference between the “cost basis” (what it cost you to acquire the asset) and the selling price.