Don't gamble with reinsurance gains

Donna Harris covers automotive retailing for Automotive News
LAS VEGAS -- Attention, all you dealers with your own reinsurance companies: Now may be the time to liquidate the company and take advantage of lower tax rates.

The party's over, said an expert panel on reinsurance at the F&I Management & Technology Agent Symposium in Las Vegas earlier this week.

Two federal laws lowered the tax rates on dividends and capital gains in 2003, but the rates will expire Dec. 31. If the rate cuts aren't extended or made permanent, we'll revert to 2002 levels.

A capital gain on an asset held at least a year is currently taxed at 15 percent, compared with 20 percent in 2002.

Is there a chance the cuts will be reinstated? Well, maybe. But not one of the experts was willing to bet on it -- even here in Las Vegas.

ATTENTION COMMENTERS: Automotive News has monitored a significant increase in the number of personal attacks and abusive comments on our site. We encourage our readers to voice their opinions and argue their points. We expect disagreement. We do not expect our readers to turn on each other. We will be aggressively deleting all comments that personally attack another poster, or an article author, even if the comment is otherwise a well-argued observation. If we see repeated behavior, we will ban the commenter. Please help us maintain a civil level of discourse.

Email Newsletters
  • General newsletters
  • (Weekdays)
  • (Mondays)
  • (As needed)
  • Video newscasts
  • (Weekdays)
  • (Weekdays)
  • (Saturdays)
  • Special interest newsletters
  • (Thursdays)
  • (Tuesdays)
  • (Monthly)
  • (Monthly)
  • (Wednesdays)
  • (Bimonthly)
  • Special reports
  • (As needed)
  • (As needed)
  • Communication preferences
  • You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.