GameStop Millionaire? Blackberry or AMC stock money? The government gets half, or more than half, sooner than you think! Your quarterly tax payments are coming due fast, and some moves must be made ASAP. Apply advanced Income Tax Strategies to avoid owing millions to the IRS!
By James L. Cunningham Jr., Attorney at Law
If you made serious money on the stock market, especially during the recent “short squeeze” played on GameStop hedge fund investors, you could suddenly find yourself owing millions of dollars in taxes–and very, very soon.
If you realized any important gains through sales, regardless of whether you re-invested that money in other stocks, you need to do some significant financial planning. And you need to do it right now, before your quarterly tax payments become due.
Importantly, as of this writing, IRS has not said the tax filing deadline extension to May 17 applies to quarterly payments, and neither has California — so don’t assume you have extra time.
Sudden Millionaires May Not Realize They Have Millionaire Tax Bills
In January of 2021, something very special happened in a subgroup of Reddit called Wall Street Bets. This group took on two major hedge funds that had bet against GameStop stock. The group rapidly purchased GameStop (GME) shares—and many of these small investors won big, as the price of the stock skyrocketed, partly due to the massive over-shorting by the funds. In Wall Street parlance, this is called a “short squeeze.”
Some of these folks got out while the getting was good, and with massive, realized gains. Similar maneuvers occurred with AMC and Blackberry stocks.
Now, a slew of newly-minted millionaires should be asking: “What on earth do I do about taxes? How can I hold on to what I’ve got?” If they don’t get answers fast, they could get slammed by catastrophic tax consequences.
We’ve Put Together a Legal & Tax Team for Windfall Gains
You may have recently made significant short term capital gains. You may also be an advisor to a newly minted millionaire and are an accountant, lawyer, financial advisor or simply a trusted friend or family member.
The folks who have achieved these incredible short-term gains are smart people who made the right moves at the right time. They have seen collective gains in the the hundreds of millions, if not billions of dollars.
We currently represent many of these savvy “Gamestonk investors” and are helping them craft individualized, custom tax planning strategies to minimize income, capital gains and other taxes that will be due in 2021 and 2022.
To help these folks, we’ve assembled a legal & financial “A-team” to make sure their taxes are minimized and their wealth preserved.
GameStop Investors Must Act Fast to Preserve Wealth
But time is of the essence.
Let’s imagine a hypothetical investor named Vicki. Say she watched the Reddit threads, picked her moment, and invested $80,000 when the moment was right. During the short squeeze, when her portfolio was valued at $80 million, Vicki managed to liquidate $50 million of her position. That’s great! Until…
Vicki’s overall tax liability? Now approximately $28 million!
That’s more than half the liquid amount, and time is fast running out to do anything about it. For starters, if she misses quarterly estimated tax deadlines, she might have to pay penalties in the millions. Just as importantly, however, as a Californian, Vicki can take advantage of special strategies for asset protection, tax mitigation and minimization—if she moves fast.
Best Strategies to Reduce Tax Bill Should Happen Before Quarterlies Due
CunninghamLegal has a number of advanced tax planning strategies to reduce the overall tax bill for sudden gains–but many of them should be implemented before quarterlies are due April 15, June 15, Sept 15, or at the very latest, December 31st.
If Dec. 31 sounds like a lot of time, it’s not. The complex financial moves—not to mention deploying the right team of planners—will take time.
California Offers Special Opportunities
Why are CunninghamLegal’s income tax strategies so time-sensitive? Partially, because of California income tax benefits. That’s right, the “golden” state has a number of golden opportunities to save money, but to get the full benefit, you have to make certain moves very quickly. And don’t forget that your California quarterlies are also due, along with federal quarterlies!
Our Estate & Tax Planning Attorneys Want to Reduce Your Tax Bill
In summary–if you took advantage of the big short squeeze on GameStop, AMC, Blackberry, and other stocks: Don’t delay! You need to get your advanced tax planning team together immediately in order to hold on to what you’ve got!
What Do We Do as California Estate Planning Attorney Specialists?
The lawyers and staff at CunninghamLegal help people plan for some of the most difficult times in their lives; then we guide them when those times come.
Make an appointment to meet with CunninghamLegal for California Estate Planning and Trust Administration. We have offices throughout California, and we offer in-person, phone, and Zoom appointments. Just call (866) 988-3956 or book an appointment online.
Please also consider joining one of our free online Estate Planning Webinars.
We look forward to working with you!
James Cunningham Jr., Esq.
At CunninghamLegal, we guide savvy, caring families in the protection and transfer of multi-generational wealth.