For better or worse, over the past several years we've paid no taxes on our withdrawals from taxable accounts, owing to their paucity. That's been true for all years except 2020, when I sold 93% of our BRK shares when my wife was panicking about market performance early in the Covid crisis. As we're not youngsters, I didn't want to take the risk of leaving her in a sorry financial state. Three weeks later I bought most of it back on a rapid upswing at about the same price I'd sold it, so our temporary market losses were soon erased.

But that year we were hit with quite substantial capital gains taxes, as we'd owned the BRK shares I sold for many years. Based on our income and expense patterns, and my awareness of the inadvisability of trading on the basis of macroeconomic factors, that now appears to have been an entirely avoidable loss. While it hasn't posed any real problem for us, primarily thanks to BRK's excellent performance since then, it did inflict temporary pain. Of course that's how I see it now from the perspective of 20/20 hindsight.

Tom

Berkshire Hathaway FAQ

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