The news of the week in Cleveland is the sale of the Browns by Randy Lerner to Jimmy Haslem. The deal is reported to be more than $1 billion, nearly doubling the $530 million purchase price. Although completing the transaction during the first week of training camp may be questionable timing for some, it does make some sense from a tax planning perspective.
Effective January 1, 2013, the Bush-era tax cuts, which have already been extended once, are set to expire unless Congress acts. This means that both ordinary income rates and capital gains rates are set to increase. By selling the Browns in 2012, Randy Lerner has assured himself of paying capital gains at a rate of 15%. As it stands now, the capital gain tax rate increases to 20% in 2013, plus an additional 3.8% Medicare tax is in effect for high-income earners due to the healthcare reform laws passed in 2010. Randy Lerner could have saved up to $41,360,000 in taxes!
Thinking about selling investments and wondering if you should do so this year? Contact our Cleveland and Akron tax professionals at 440-449-6800.