Are you planning to sell securities at the end of the year to “harvest” a long-term capital gain? Generally, the maximum tax rate on long-term capital gains is 15% (20% for certain upper-income taxpayers).
To qualify as long-term gain, you must have owned the securities for more than one year. For these purposes, the controlling date is generally the trade date, not the settlement date. Therefore, if you acquired securities on December 30, 2019, and sell them at a gain on December 31, 2020, the transaction qualifies as a long-term gain on your 2020 return.
But there are a few twists to the rules for capital gains and losses. Check with professional tax advisors to ensure that you will realize the intended tax results.