For this week's installment of "Cramer's Playbook," Cramer answered the questions of how dividends are taxed and whether taxes should be considered in investing decisions.
Cramer explained that taxes on investments have indeed gone up this year. Gains made from holdings of less than a year will be taxed at ordinary income levels, typically 39.6%. Gains from over a year qualify as long-term gains and they are taxed at just 15% for more people, 20% for higher-income brackets.
So does that mean investors should hold onto investments for at least a year to save on taxes? Absolutely not, said Cramer. Never let tax planning control your investment decisions.
The government will take a cut of your gains, yes, but better to have gains than not have them by holding onto a stock too long and have your gains evaporate before your eyes. Doing your homework is hard enough, Cramer concluded. Don't add needless tax worries to your to-do list.
No Huddle Offense
Shares of both stocks have round-tripped this year. FireEye shares started the year at $57, rallied to $96 and are now down at $54. Splunk started at $69, also rallied to $96 and then collapsed to $66 a share. Both companies are still riding huge growth themes, so what happened?
Cramer noted a huge block of insider selling at FireEye at its highs. It's clear now that the stock just couldn't handle that many shares being offered. Splunk had similar selling at its highs, along with a "mysterious" large block of shares that were offered for sale, also near its highs.
Cramer said these stocks are simply hard to own and have skittish shareholder bases. When compared to the industrials, which have solid shareholder bases and little insider selling, it's easy to see why investors have been preferring these names instead.
To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.
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-- Written by Scott Rutt in Washington, D.C.
To email Scott about this article, click here: Scott Rutt