Cap Gains Taxes Causing Tech Selloff?
Great article over at Quartz regarding the impact that the 2013 increase in Long Term Cap Gains tax rates might be having on the current market selloff. We saw some of this at the end of 2012 with 1) people selling companies and 2) valuations for estate tax purposes.
As the article conjectures, those that were “in the money” sold off assets at the end of 2012 in order to lock in gains at the then current Long Term Capital Gains rate. In our case, we saw a bubble in valuation work in support of people selling companies as well as gifting assets as part of an estate plan.
As the article mentions, those that sold equities needed to sit out a year in order to lock in the gain. Now the question is, what happens next? We’re curious to see if this downward inflection begins to have an impact on the lower end of the market – which is usually marked by the tightening of lending and lack of access to capital.