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The 20 counties where taxpayers netted the highest capital gains
The 20 counties where taxpayers netted the highest capital gains

Yahoo

time31-05-2025

  • Business
  • Yahoo

The 20 counties where taxpayers netted the highest capital gains

The more value that investors can receive in the form of long-term capital gains rather than ordinary income, the less they will pay back to Uncle Sam. Those in the 20 counties below ranked by the average net capital gains reported on their federal returns to the IRS are getting above-average appreciation on their assets with much lower tax rates, generally, than their incoming income, according to a study last month by advisor lead generation and client matchmaking service SmartAsset. The mix of areas known for a large concentration of wealthy residents and regions that don't immediately come to mind as a home to lots of rich people offered only more evidence of the investment industry's national scope. For financial advisors and their clients, the list provided geographic insights into the potential wealth management client base in the areas, and a reminder of important state-level variations in taxes that could affect portfolios and after-tax yields. "Net capital gains represent the profits a taxpayer recognizes from selling a capital asset after offsetting capital losses. These gains are often created by highly appreciated assets," Kathy Buchs, a senior tax advisor, team leader and managing director with Cleveland, Ohio-based registered investment advisory firm MAI Capital Management, said in an email. "We take geography into account when advising clients to sell an asset or consider tax loss harvesting due to state income tax ramifications," Buchs continued. "For example, California is a high-tax state that does not have preferential rates for capital gains. Therefore, it tends to be much more expensive to recognize gains in that state as compared to others." That difference in tax rules at the state level raises the possibility of strategies such as an incomplete gift non-grantor trust that, in some areas, could "eliminate the state taxation of the trust-owned portfolio," said Richard Austin, an executive director for estate and business planning with San Diego and Waltham, Massachusetts-based RIA firm Integrated Partners. In some cases, investors can even offset their capital gains for federal tax purposes based on losses in other holdings, he noted in an email. "Tax efficiency significantly impacts the performance of a client's portfolio by maximizing the after-tax return on investments," Austin said. "Investing across different countries and regions can reduce portfolio volatility. Markets in different parts of the world often have low correlation, meaning they don't always move in the same direction at the same time. If one market experiences a downturn, others might perform well, potentially stabilizing overall returns and the potential for future capital gains. State-specific tax rates impact tax efficiency of a portfolio. The difference in state income taxes creates a significant layer of complexity in achieving tax efficiency for a client's portfolio." Even though any type of data presents the possibility of noise factors affecting any particular region, the study "highlights that taking geography into account is essential when advising clients on their asset allocations," said Michelle Ash, a senior wealth advisor with the Jacksonville, Florida-based office of RIA firm Mercer Advisors. "Net capital gains is measured when a person is selling assets, and so it requires past investment success to be in that position," Ash said in an email. "It's no surprise to me that Florida would be the top state by this metric. Florida has no state income, inheritance or estate taxes, and so it's a beneficial place to live when you're selling assets. These Florida traits also attract a lot of retiring individuals who may be selling assets like homes and businesses when they retire or move." In focusing on capital gains, SmartAsset sought to home in on the areas where investors netted the most gains with preferential rates compared to ordinary income, according to the report's author, SmartAsset Director of Economic Analysis Jaclyn DeJohn. "Net capital gains, the profits from selling assets like stocks, real estate or businesses, are a key measure of investment success and regional wealth," DeJohn wrote. "Overall, high net capital gains can signal robust markets and affluent populations, with realized gains potentially boosting local economies through tax revenues and spending." Besides the listing below, here are some of the other interesting takeaways from the study: Three Georgia counties, Chattahoochee, Quitman and Taliaferro, displayed the smallest average net capital gains, at $2,400 or less. Fewer than 10% of returns in the counties had net capital gains. At the state level, West Virginia tax returns had the lowest average net capital gains at $14,612, followed by Wisconsin with $19,590 and Iowa with $20,220. On the other end of the spectrum among the states, federal returns out of Florida ($84,911), Wyoming ($84,246), Nevada ($77,491), the District of Columbia ($58,733) and Texas ($52,926) reported the highest average net capital gains. Scroll down the slideshow for the ranking of the top 20 counties in the U.S. in terms of average net capital gains. To see a list of the top 10 cities with the highest income among retirees, click here. For the group of the top 20 metropolitan areas where financial advisors' median pay increased the most last year, follow this link. Note: The below rankings are based on a report by SmartAsset called, "Where Americans Earn the Most From Investments." The study crunched the latest tax return data for the 2022 tax year released by the IRS across 3,022 U.S. counties and for each of the 50 states and the District of Columbia. The data include average net capital gains and investment-yield figures like taxable and tax-exempt interest and ordinary and qualified dividends. # of returns: 15,180# of returns reporting net capital gains: 6,010 (40%)Mean taxable interest: $40,033Mean tax-exempt interest: $39,659Mean qualified dividends: $167,921Mean ordinary dividends: $196,121Average net capital gains: $515,267 # of returns: 2,390# of returns reporting net capital gains: 150 (6%)Mean taxable interest: $977Mean tax-exempt interest: $1,600Mean qualified dividends: $4,055Mean ordinary dividends: $6,336Average net capital gains: $317,793 # of returns: 10,480# of returns reporting net capital gains: 4,170 (40%)Mean taxable interest: $30,111Mean tax-exempt interest: $28,688Mean qualified dividends: $53,044Mean ordinary dividends: $67,047Average net capital gains: $312,592 # of returns: 1,480# of returns reporting net capital gains: 300 (20%)Mean taxable interest: $6,082Mean tax-exempt interest: $13,317Mean qualified dividends: $11,627Mean ordinary dividends: $16,190Average net capital gains: $233,680 # of returns: 24,870# of returns reporting net capital gains: 9,370 (38%)Mean taxable interest: $9,425Mean tax-exempt interest: $22,022Mean qualified dividends: $36,713Mean ordinary dividends: $47,348Average net capital gains: $219,262 # of returns: 45,760# of returns reporting net capital gains: 12,220 (27%)Mean taxable interest: $13,432Mean tax-exempt interest: $29,645Mean qualified dividends: $66,673Mean ordinary dividends: $75,201Average net capital gains: $191,886 # of returns: 784,220# of returns reporting net capital gains: 216,920 (28%)Mean taxable interest: $16,155Mean tax-exempt interest: $29,882Mean qualified dividends: $42,043Mean ordinary dividends: $50,783Average net capital gains: $186,281 # of returns: 1,436,490# of returns reporting net capital gains: 202,220 (14%)Mean taxable interest: $13,127Mean tax-exempt interest: $23,350Mean qualified dividends: $29,924Mean ordinary dividends: $38,036Average net capital gains: $184,899 # of returns: 213,630# of returns reporting net capital gains: 73,450 (34%)Mean taxable interest: $12,151Mean tax-exempt interest: $29,690Mean qualified dividends: $47,507Mean ordinary dividends: $57,951Average net capital gains: $184,017 # of returns: 4,500# of returns reporting net capital gains: 1,560 (35%)Mean taxable interest: $9,440Mean tax-exempt interest: $17,268Mean qualified dividends: $25,636Mean ordinary dividends: $37,121Average net capital gains: $183,261 # of returns: 13,540# of returns reporting net capital gains: 4,910 (36%)Mean taxable interest: $10,555Mean tax-exempt interest: $19,372Mean qualified dividends: $38,999Mean ordinary dividends: $48,990Average net capital gains: $176,812 # of returns: 10,580# of returns reporting net capital gains: 1,720 (16%)Mean taxable interest: $1,262Mean tax-exempt interest: $4,845Mean qualified dividends: $3,916Mean ordinary dividends: $5,540Average net capital gains: $150,127 # of returns: 846,440# of returns reporting net capital gains: 302,610 (36%)Mean taxable interest: $19,397Mean tax-exempt interest: $18,965Mean qualified dividends: $32,211Mean ordinary dividends: $42,540Average net capital gains: $149,273 # of returns: 40,310# of returns reporting net capital gains: 10,470 (26%)Mean taxable interest: $8,426Mean tax-exempt interest: $17,430Mean qualified dividends: $21,624Mean ordinary dividends: $27,814Average net capital gains: $140,537 # of returns: 84,420# of returns reporting net capital gains: 28,290 (34%)Mean taxable interest: $10,613Mean tax-exempt interest: $19,398Mean qualified dividends: $32,712Mean ordinary dividends: $39,381Average net capital gains: $130,146 # of returns: 85,800# of returns reporting net capital gains: 25,510 (30%)Mean taxable interest: $9,009Mean tax-exempt interest: $23,468Mean qualified dividends: $35,483Mean ordinary dividends: $42,487Average net capital gains: $126,594 # of returns: 16,800# of returns reporting net capital gains: 4,520 (27%)Mean taxable interest: $5,083Mean tax-exempt interest: $10,513Mean qualified dividends: $13,262Mean ordinary dividends: $17,528Average net capital gains: $113,429 # of returns: 4,920# of returns reporting net capital gains: 1,480 (30%)Mean taxable interest: $1,936Mean tax-exempt interest: $10,200Mean qualified dividends: $17,662Mean ordinary dividends: $18,627Average net capital gains: $111,880 # of returns: 1,213,090# of returns reporting net capital gains: 188,570 (16%)Mean taxable interest: $7,393Mean tax-exempt interest: $14,890Mean qualified dividends: $20,200Mean ordinary dividends: $24,441Average net capital gains: $110,534 # of returns: 636,070# of returns reporting net capital gains: 172,730 (27%)Mean taxable interest: $5,131Mean tax-exempt interest: $9,958Mean qualified dividends: $12,869Mean ordinary dividends: $16,792Average net capital gains: $109,439

These two health-care names work in a 'difficult' market, says MAI Capital Management strategist
These two health-care names work in a 'difficult' market, says MAI Capital Management strategist

CNBC

time01-05-2025

  • Business
  • CNBC

These two health-care names work in a 'difficult' market, says MAI Capital Management strategist

In this volatile environment, there could be big opportunities in two health-care names, according to Chris Grisanti, MAI Capital Management's chief market strategist. Stocks have been rocky amid fears about President Donald Trump' s high-tariff policy and the economy. On Thursday, equities moved up again after investors reacted to strong earnings from two tech titans, Meta Platforms and Microsoft , out after the bell Wednesday. Grisanti said his health-care plays will work best "when the market gets more difficult again." He gave his two buys, and one name he's avoiding, during the " Three Stock Lunch " segment on CNBC's " Power Lunch " Tuesday. AbbVie The global biopharmaceutical company has done a great job of replacing its blockbuster anti-inflammatory drug Humira, which has faced declining sales since it lost patent protection in 2023, Grisanti said. AbbVie now has two new drugs, Skyrizi and Rinvoq. The company posted first-quarter earnings and revenue last week that topped Street expectations. It also raised its full-year earnings-per-share guidance. AbbVie also announced in February it will invest at least $10 billion in manufacturing in the United States, including four new plants. "They've got a great management [team] there," Grisanti said. "They're mixing up the product line and so that should be real strong." ABBV YTD mountain AbbVie While shares have moved higher in recent days, they still have "a ways to go," he said. The stock lost nearly 7% in April. It is up more than 9% year to date and has a dividend yield of 3.36% UnitedHealth UnitedHealth Group is currently "in the penalty box, for good reason," Grisanti said. Shares have been pummeled since mid-April, when the health-care provider cut its annual profit forecast due to higher-than-expected medical costs. The stock hit a 52-week low on Thursday and is down more than 20% year to date. It has a 2.04% dividend yield. "This is a very rare chance to get this stock, which has great management, terrific 20-year growth profile, at a cheap valuation," Grisanti said. Booking Holdings The last name on Grisanti's list is one that he would not recommend right now: Booking Holdings . The online travel booking provider beat on both the top and bottom lines when it reported first-quarter results on Tuesday. Its gross bookings narrowly topped expectations. However, tariffs are going to start hitting corporate earnings this summer, Grisanti said. "Travel is about the most discretionary category we have," he said. "It's a great company, but I don't want to be owning it if we're sliding towards a recession." Shares are up 3% so far this year.

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