If you’ve been saving up a lot of money, especially of the capital gains sort, Oregon’s taxman may well want a big piece of it. However, imagine if we told you that you could recoup some of your earned money rather than paying more taxes.
Capital gains tax is one of our many specialties at Dominion because we help Oregonian companies as well as high-net-worth individuals. Let’s find out more as we dig in deep on Oregon capital gains tax laws, and what our team at Dominion can do for you to reduce your bill.
Capital Gains in the Beaver State Decoded
Capital gains are defined as increase in value of an asset from the time you bought it to the time you sell it. Think of it like this: If you bought a vintage comic book for $10. Years later, a collector pays you $100 for it. That $90 profit? That’s your capital gain.
Now, there are two types of capital gains: realized and unrealized. Gains realized happens when you actually sell the asset and take the profit. On the other hand, unrealized gains are just the increased value of an asset you still own.
But if you had that comic book now worth $100 in your attic, that’s an unrealized gain. The key thing to remember is that you usually only pay taxes on realized gains.
That’s where Oregon throws a curveball. Oregon does not distinguish between short-term and long-term gains (as the federal government does, with different tax rates for each), but taxes all capital gains the same. The profit is taxed as ordinary income, whether you held that comic book for a month or a decade.
This means your capital gains will be subject to Oregon’s progressive income tax rates, which look like this for 2024:
Now think that you sold a piece of real estate for $500,000 that cost you $200,000 when you bought it. That’s a $300,000 capital gain. Oregon will tax various parts of that $300,000 as shown above depending on total taxable income.
You can see how things can get complicated quickly. That’s where Dominion comes in.
Conventional Tax Planning and Its Shortcomings
Many high-net-worth individuals think that the best way to minimized taxes is maximized deductions and exemptions. For the bulk of workers with average incomes, this tactic may bring some relief, but it is not enough for those with substantial holdings and those in Oregon.
Getting Tax-Deferred Retirement Accounts Right
Contributing to tax deferred retirement accounts, like 401(k) or IRA, is a common misconception that will do a lot to reduce your tax burden. These accounts provide great benefits but might not make the difference if you have a lot of capital gains. Why? It’s because the tax-deferred advantage doesn’t necessarily apply to gains received from selling appreciated assets so much as it does to ordinary income. See the difference?
What About Standard Deductions?
Some people also believe that using standard deductions will reduce your taxable income enough. However, these deductions are often capped, and so they don’t work so well for those with high incomes. You can get some progress, but it won’t do the job well.
Moreover, Oregon’s tax system is a special case. As we mentioned earlier, the state doesn’t distinguish between short-term and long-term capital gains and taxes all gains as ordinary income. In other words, strategies tailored just around long-term gains optimization (common with traditional tax planning) will not show as much effectiveness in Oregon.
Only Qualified Strategic Planning Will Do
Tax laws are intricate and constantly changing, which is just the reality of the situation. Trying to rely on generic tax planning advice or outdated strategies won’t do anything to advance your plan because eventually you’ll end up lost and even farther away from where you want to be.
For high-net-worth individuals, you really need to look at the nuance of Oregon’s tax code and your individual financial picture. Dominion hits the mark here. Those complexities of wealth preservation and strategizing are known to us, and the complexities of strategizing beyond the limitations of conventional tax planning are also within our expertise.
We Take a Distinct Approach to Keep Your Wealth Safe
At Dominion we don’t do this in a blanket way. Each client we serve has unique financial goals and concerns. We understand this. That’s why we invest time to tailor our strategies to each person’s situation to protect and maximize their wealth for the long term.
Tax-Exempt Trusts
One of our key strategies is tax exempt trusts. These are incredible tools for reducing your capital gains tax liability. When you place assets in a trust in the right way, you can actually shield those assets from taxation so they can continue to grow and appreciate without being gobbled up by taxes.
Strategic Investments
We also help our clients to make strategic investment which have significant tax benefits to our clients. For example, if you invest in renewable energy projects, you’re allowed to qualify for government tax incentives which can be used to cancel the capital gains tax on your investment.
Charitable Giving
We also help clients use charitable giving as a tax optimization tool. Two of the strategies that can provide big tax benefits while funding causes you to care about are Charitable Lead Annuity Trusts (CLATs) and conservation easements.
We Are 100% Committed to Your Financial Health
However, what makes Dominion stand out is our dedication to our clients’ financial well-being. With our global web of attorneys, tax advisors and investment specialists, we draw from that talent to give our clients a complete wealth management solution.
We have a team with in depth knowledge of international tax laws and regulations to ensure your assets are protected wherever you live or where your assets are located.
We don’t follow trends or chase quick fixes. We don’t build short-term strategies, we build long-term strategies. We want to help you grow your wealth, but more than that, that’s the type of ally you need on your side during tumultuous times like these.
Protecting Your Privacy
Privacy is just as important to many of Dominion’s clients as protecting their assets. We know the need for discretion. In fact, it’s what we have made our entire approach about. We want you to feel that your wealth and the moves you make to advance it are kept 100% under wraps. It’s no one else’s business but your own, and we do our best to keep it that way.
Unlike a traditional firm which might employ old ways and generic solutions, Dominion works with strict, absolute confidentiality. Your sensitive information is only kept securely on our communication channels, encrypted data storage and our protocols within our organization.
Using the foundation of our global network, we structure your assets in jurisdictions with strong privacy laws and keep your finances out of the hands of prying eyes. We strongly believe that our anonymity and client confidentiality are safe with trusted partners all around the world.
You can feel certain that your financial affairs will be entrusted to the best possible care and privacy with Dominion. True wealth management, we believe, means protecting not only your assets but also your peace of mind.
Strategic Asset Sales
Timing your asset sales can make quite a difference when it comes to minimizing capital gains tax. What you sell is only a small part of the equation — the other side is all about when you sell it.
Say your current income bracket is an example. If you think you will have a lower income year, you could benefit by realizing capital gains that year (as they’ll likely be taxed at a lower rate). On the flip side, if you anticipate having a higher income next year, you may wish to postpone those gains (if you can).
The second factor is the holding period. Oregon doesn’t make a distinction between short-term or long-term gains for state taxation purposes as the federal government does. If you’ve held an asset for a year or more, selling it will be subject to lower federal capital gains tax rates.
Of course, timing asset sales is a consideration that needs to be considered in context of your overall finances. Dominion can guide you towards these decisions to help you decide the best way to not pay more in taxes than you need to.
Dominion Is the Way to Secure Your Legacy
Taxes shouldn’t be allowed to chew away at the riches you have laboriously created. Get in touch with Dominion now to learn how our unique method of asset protection and wealth management could provide financial peace of mind. Let our pros guard your legacy and assets for your family’s future generations to come.
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