Pioneer Press - Medtronic's Covidien deal would mean tax hit for long-term investors- Steve Gilbertson, July 26, 2014
With the same holdings valued at last week's price, the investor would realize a gain of more than $60,000 with the Covidien deal, said Steve Gilbertson, a financial planner with Accredited Investors in Edina. In a worst case scenario, tax on the hypothetical investor's capital gains, plus other state and federal taxes, could run as high as 35 percent, Gilbertson said, or more than $20,000.
Even some investors who expected to realize capital gains during their lifetime have been frustrated by the tax implications of Medtronic transaction, said Gilbertson.
"By having the significant capital gains taxed all at once, it might effectively push them up to a higher tax rate than if they could have sold it over a number of years," Gilbertson said.
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