Last year, many taxpayers accelerated income and sold stock realizing capital gains to lock in lower tax rates in anticipation of all the tax hikes that hit in January.
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In this decade, private-equity fund managers have gathered billions even though investors who back such funds have to lock their capital away for up to ten years.
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You lock up your capital until retirement, but it is protected from double taxation.
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But as their empires grew, so did the need to raise cash and lock in some capital gains -- and go public.
They actually diminish the economic damage caused by lock-in of capital gains realizations by unfreezing capital and increasing investment.
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Some of those people could conceivably sell at least a portion of their holdings to lock in the current capital gains rate of 15% if they expect that rate to increase.
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The supply of deals coming to market in the US should also get a boost this year due to the two-year tax cut extension that may spur some sellers to lock in profits at lower capital gains tax rates.
The stakes lock up a company's capital and it is hard to claim they spread risk.
Often, clients face disincentives to withdrawing their money, such as lock-ups or forced realisation of capital gains.
In the days that followed, the ECB lobbied hard behind the scenes to water down the Deauville pact, arguing that it would lock Europe's weakest governments out of capital markets.
Chris Bertelsen, chief investment officer at Global Financial Private Capital, says the slump is an opportunity for investors to pick up stocks at a good price and lock in high dividend income.
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