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Use This Massive Tax Break for Long-Term Investors

Nobody likes paying any more tax than necessary. For long-term investors, one key tax break is available to everyone, even though many investors never take advantage of it.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, looks at the biggest tax break long-term investors get: the ability to time their capital gains. Dan notes that if you hold stocks for the long run, you never have to pay tax on capital gains until you sell them. Moreover, if you pass them on to your heirs unsold, they'll receive a stepped-up tax basis in the shares, essentially allowing them to avoid tax on those gains entirely. Dan discusses the impact of this tax break on investors in Altria (NYSE: MO  ) , Wal-Mart (NYSE: WMT  ) , Oracle (NYSE: ORCL  ) , and Microsoft (NASDAQ: MSFT  ) over the decades, as well as the potential for shareholders in additional stocks to reap the benefits of this tax break.

Be smart about your taxes for 2014
Knowing the tax advantages of long-term investing is just one way you can cut your tax bill to Uncle Sam. In our brand-new special report "How You Can Fight Back Against Higher Taxes," The Motley Fool's tax experts run through what to watch out for in doing your tax planning this year. With its concrete advice on how to cut taxes for decades to come, you won't want to miss out. Click here to get your copy today -- it's absolutely free.

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Dan Caplinger

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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8/28/2015 10:31 AM
MO $54.02 Up +0.31 +0.58%
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Oracle CAPS Rating: ****
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