Just when you thought tax rules could not get anymore confusing. IRS Clarifies Position on Wash Sales and IRAs

In Revenue Ruling 2008-5, the IRS has ruled that the wash sales rules apply when a taxpayer sells stock or other securities outside of an IRA for a loss, and purchases substantially identical stock or securities in an IRA (traditional or Roth) within 30 days before or after the sale. The result is that the loss on the sale of the stock or securities is disallowed. In addition, the taxpayer's basis in the IRA is not increased by the amount of the disallowed loss.

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Just when you think you've finally figured out your taxes, count on Congress to tweak the rules.

Keeping up with rapidly changing tax laws, phase-ins, phase-outs, regulations, revenue rulings and court decisions can be daunting even for veteran tax pros. Consider: The 2008 edition of CCH's comprehensive federal tax-law service contained more than 67,500 pages, up from 40,500 pages in 1995.

"A lot of the tax law is really quite hard -- and it can also be very counterintuitive," says Mel Schwarz, a partner and director of tax legislative affairs at Grant Thornton LLP in Washington.

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The Wall Street Journal headline really sets the tone for our marketing message this week.

It’s tax season, are you capitalizing on it?

Here’s a talking point for clients and a great lead for a marketing piece:

Zero Percent Federal Capital Gains Tax Rate Boon to Lower-Tax Bracket Investors

Investors in lower income tax brackets will pay no capital gains tax this year. For lower-tax bracket individuals, the long-term capital gains tax rate temporarily drops to 0% in 2008, 2009, and 2010 (in 2011, this rate reverts to 10%). This may be a signal for some investors to sell. Before you advise your clients, be sure you understand who qualifies and who doesn't.

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