New Cost Basis Applications to Help Top Taxpayers Maximize Value of Capital Losses in 2013

PHOENIX, Jan. 23, 2013 /PRNewswire/ -- Determining cost basis and capital gains and loss options will be even more important in 2013 for investors in the top tax bracket. That's because the compromise to avoid the "fiscal cliff" increases their tax rate to 20 percent on capital gains. As a result, tax losses for investors in the top tax bracket will be 33 percent more valuable in 2013.

To identify these capital losses, tax professionals who serve investors in the top tax bracket will increasingly rely on powerful new and sophisticated cost basis applications like Netbasis from Networth Services. These applications enable tax professionals to effectively manage the amount their wealthy clients choose to report as capital gains or losses on their Schedule D form. 

"Netbasis is able to make calculations like this in a matter of seconds, giving tax pros choices about the way they report stock sales based upon their clients' personal situations, " said Nico Willis, president and CEO of Networth Services.  "Given the increased value of capital losses for those in the top tax bracket, tax professionals are going to want to carefully consider the tax treatment options available to their clients, especially if any show a capital loss."

The 'fiscal cliff" agreement is expected to be a boon for tax professionals, as more investors turn to pros to help them minimize their capital gains and maximize losses. In fact about six million new U.S. households could become new clients of tax professionals as the cost basis reporting requirements are phased in, according to a report by international research and advisory firm Celent. 

The attached chart shows the variety of tax treatment options available to an investor who purchased 400 shares of General Electric (GE) in 1977, made no subsequent outright purchases of GE in the intervening years, reinvested all dividends, and sold 3,058 shares, or $50,000, on November 11, 2012.

The options range from a long-term gain of more than $46,000 to a long-term loss of nearly $81,000.

Netbasis automatically calculates the adjusted cost basis for any security going back as far as 1925. It also gives investors the ability to choose the tax treatment of securities sales, which is allowed under the new cost basis reporting requirements enacted by the Economic Stabilization Act of 2008. Netbasis can also calculate the cost basis for securities that were gifted or inherited.

Netbasis is available to individual investors as well as tax and accounting professionals.

For media inquiries, please contact Barry Cohen at Networth Services at (602) 222-6380.

SOURCE NetWorth Services