Capital Gains & Losses

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Capital Gains & Losses

2018-Long-Term Capital Gains and Qualified Dividends Tax Rates

Asked Thursday, December 20, 2018 by an anonymous user
Long-Term Capital Gains (and Qualified Dividends) have been subject to special maximum tax rates. The Act generally retains the maximum tax rate structure.
For 2018 the 15% rate applies once the following income limits are met: a. Joint returns - $77,200
b. Head of Household returns - $51,700
c. Single returns - $38,600
d. Married Separate returns - $38,600
e. Trusts and Estates - $2,600

For 2018 the 20% rate will apply to long-term capital gains and qualified dividends above these income levels:
a. Joint returns - $479,000
b. Head of Household returns - $452,400
d. Married Separate returns - $239,500
e. Trusts and Estates - $12,700

Prior to the Act, a 0% capital gain rate applied to capital gains where the taxpayer is paying in the 10% or 15% rate on ordinary income; a 15% capital gain rate applied to any taxpayer paying any other rate below 39.6%; and a 20% rate applied to the high-income taxpayers paying 39.6% on ordinary income.
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Capital Gains & Losses

2018-Sale of Residence exclusion

Asked Thursday, December 20, 2018 by an anonymous user
The rules relating to the exclusion of gain on the sale of a principal residence remained unchanged. $500,000 for married couples and $250,000 for the other filing status.
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Capital Gains & Losses

Form 1099-B: Cost Basis Categories

Asked Tuesday, March 27, 2012 by an anonymous user
Category A = Covered = Cost basis is reported to the IRS
Category B = Non-Covered = Cost basis is Not reported to the IRS
Category C = Supplemental = Proceeds Not reported to the IRS
Stock Options fall into Category C which is supplemental information that is supplied to customers when available, but is not reported to the IRS.
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Capital Gains & Losses

Wash Sale

Asked Tuesday, March 27, 2012 by an anonymous user
Losses from Wash Sales are disallowed by the IRS and the amount of the loss is added to the cost basis of the repurchased shares on a per share basis.
The holding period is also adjusted to include the days the security was held before the original sale.
When an investor sells shares at a loss and then repurchases substantially identical shares within 61-day window (30 days before and/or after the date of sale, it is called a wash sale.
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Capital Gains & Losses

Cost Basis

Asked Tuesday, March 27, 2012 by an anonymous user
Cost basis is the value of an asset used to calculate capital gain or loss for tax purposes.
For most positions, cost basis is purchase price plus commissions plus disallowed wash sales plus reinvested capital during the time before the sale.
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Capital Gains & Losses

Capital Gains Tax Rates -2013

Asked Thursday, January 12, 2012 by an anonymous user
If your tax bracket = 10% or 15%, the Short Term Capital Gain is taxed at ordinary income rates, Long Term Capital Gains and Qualifying Dividends tax rate = 0%
If tax bracket = greater than 15%, the Short Term CG taxed at ordinary rates Long Term CG and Qualifying Dividends tax rate = 15%
For 2013: ATRA, extends the current capital gains and dividends rates on income at or below $400,000 (individual filers), $425,000 (heads of households), and $450,000 (married filing jointly) for tax years beginning after December 31, 2012.
For income in excess of $400,000 (individual filers), $425,000 (heads of households) and $450,000 (married filing jointly), the rate for both capital gains and dividends is 20 percent. .
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Capital Gains & Losses

Cost basis of house received at divorce settlement

Asked Thursday, December 22, 2011 by an anonymous user
The transfer of the house to you that was "incident to a divorce" is treated as a tax-free exchange and not taxable.
The cost basis to you would be the original cost, plus improvements made over the years, not the possible appreciated fair market value as of the date of the divorce.
The current law allows an unmarried individual to exclude up to $250,000 ($500,000 married filing jointly)of gain realized on the sale of a residence.
Speak to your local CPA about the divorce settlement and tax strategies involved, that might benefit you.
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Capital Gains & Losses

What is the tax consequence of receiving stock from my spouse as part of the divorce settlement?

Asked Thursday, December 22, 2011 by an anonymous user
Transfers of any property between spouses that are incident to a divorce are treated as tax-free exchanges, and as a result, it is not reportable or taxable.
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Capital Gains & Losses

Why don't my option sales appear on form 1099 ?

Asked Friday, January 26, 2001 by an anonymous user
The IRS does not require that brokerage firms report options sales on form 1099-B. The IRS does require brokerage firms to report the assignment or exercise of options if cash is received as a result of the assignment or exercise.
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Capital Gains & Losses

Why are my gross proceeds so high on my broker's statement?

Asked Friday, January 26, 2001 by an anonymous user
Gross proceeds and profit you made are two different numbers.
Gross proceeds are the total amount associated with the sale of securities that are reported to the IRS and must be listed on your tax return.
The (profit) gain or loss is determined by calculating the difference between the original cost (plus previously taxed dividends from mutual funds) from the sales price.
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