This year-end is proving to be one of the most difficult for investors in many years. There's the uncertainty resulting from the financial credit crisis and government reactions to the crisis. There's the uncertainty from the close presidential election. There is also the uncertainty from the existing tax laws, under which the tax rates for capital gains and dividends and the top marginal tax rates for ordinary income would increase in 2011 under current law even if nothing were done by Congress.Faced with this uncertainty, the market has been in retreat, evaporating gains and producing potential losses. While most investment advisors are advising clients to remain in the market, and even use downturns such as this as an opportunity for further investment, taxpayers facing investment losses should keep in mind some tried and true tax planning opportunities, as well as some potential new developments in the tax law.

CAPITAL LOSSES

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