Or you can pay a maximum of 20 percent of your investment profits, and defer payment indefinitely. A Long Time Uncle Sam gives you a huge tax break if you hold investments for 12 months or more. You don't know for certain. What you do know for certain is this. By waiting six months, you still come out ahead even if your investment profits shrink by 20 percent.
Smart investors play the percentages.
What you know for certain when you sell investments prior to holding them for 12 months is that you'll get a big capital-gains tax bill. That's a given. What you don't know is if the new investment will do any better than the one you sold. Uncle Sam is making you an offer you shouldn't refuse. All things being equal, you can't afford not to hold investments for at least 12 months.