- Make any anticipated capital asset sales now while the 15% capital gains tax rate is still around.
- If you have a C corp, and are anticipating distributing Earnings & Profits - make the dividend now while 15% dividend tax rate will be around.
- Accelerate all revenue streams (i.e. complete contracts, etc) to have as much in 2008.
- Exercise any employee stock options now - it might be better with 15% tax rate in a crappy market than 25% in a good market. Then again, we don't know where the dividend rates are going, they might go back to the top marginal rate.
- Accelerate your gifts for 2008 and consider electing to pay gift tax. Minimize the estate and gift out as much in anticipations to changes to gift and estate taxes.
This is some of the things that people are doing right now. Miami Dolphins owner Wayne Huizenga has already said that he will now attempt to sell his remaining 50% interest in the team in 2008 rather than in risk substantially higher promised future capital gains tax hikes by the democrats. Huizenga said " He wants to double the capital gains tax, or almost double it. I'd rather give it to charity than to him."
Remember, this is generally one of the reasons why increase in marginal tax rates don't work - people with the means to plan accordingly, do so. Hint to the Democrats - if you really want to raise revenue, expand the base and lower the rate. But then again, Obama has said that he will forego revenue in the name of "fairness".
Well, the bright side is that CPA's like myself will continue to be employed and see additional work as people try to figure out the inevitable tax changes that are being anticipated.