Capital Gains & Losses
The most frequently asked tax questions related to Capital Gains & Losses
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Answer Tax QuestionsShort term stock gain - favorable lower capital gains tax rate?
Asked Friday, October 27, 2000 by an anonymous user
Favorable lower capital gains tax rates are available if a portion of your Taxable Income consists of "Net Capital Gains".
Net capital gains are your net LONG term capital gains in excess of net short term capital losses.
Your short term stock gain would not qualify as a lomg term Net capital gain.
The portion of the short term gains will be taxed as ordinary income at the tax bracket your taxable income falls in to.
Net capital gains are your net LONG term capital gains in excess of net short term capital losses.
Your short term stock gain would not qualify as a lomg term Net capital gain.
The portion of the short term gains will be taxed as ordinary income at the tax bracket your taxable income falls in to.
Stock holding period - converted to another companies stock in a merger
Asked Tuesday, October 24, 2000 by an anonymous user
If you owned shares of stock that were converted to another company's shares of stock at a later date, and you then subsequently sell the new company's stock, then the holding period starts the day after you bought the original shares of stock in the initial company.
Loss from buying and selling the same shares of stock in the same day
Asked Tuesday, October 24, 2000 by an anonymous user
The tax laws' "wash sale" provisions prohibit you from recognizing any loss from the sale of buying and selling substantially the same stock within 30 days of selling a stock.
If you incur a gain within the 30 day period, the "wash sale" provisions do not apply and gain is reportable on IRS Schedule D.
If you incur a gain within the 30 day period, the "wash sale" provisions do not apply and gain is reportable on IRS Schedule D.
Trade date or settlement date - reporting stock sales
Asked Thursday, October 19, 2000 by an anonymous user
Proceeds from stock transactions are reported to individuals on Form 1099-B.
The individual transactions are entered on IRS Forms 8949 and Schedule D.
The sales should be listed, including the trade date, not the settlement date.
The individual transactions are entered on IRS Forms 8949 and Schedule D.
The sales should be listed, including the trade date, not the settlement date.
Capital loss carryover - married filing separate filing status
Asked Thursday, October 05, 2000 by an anonymous user
The capital loss carryover from your previous year's married filing joint return may only be claimed on the married filing separate return of the spouse who originally incurred the loss.
You cannot use 50% of the loss if it originated from your spouse's sale of a asset.
You cannot use 50% of the loss if it originated from your spouse's sale of a asset.
Long Term Capital Gains - taxed differently than wage income
Asked Friday, September 29, 2000 by an anonymous user
Long-term capital gains are generally taxed at lower tax rates than those on wages and other ordinary income.
In general, if you are in the 15% tax bracket, the long-term capital gains tax rate is 0% (tax free).
If you are in tax brackets exceeding the 15% bracket, the long-term capital gains tax rate is 15%.
In general, if you are in the 15% tax bracket, the long-term capital gains tax rate is 0% (tax free).
If you are in tax brackets exceeding the 15% bracket, the long-term capital gains tax rate is 15%.
Property sale - receiving payments in future years
Asked Friday, September 29, 2000 by an anonymous user
You may elect to report the sale on IRS Form 6252 which spreads the tax liability on the gain over the life of the installment period.
You may elect not to use the installment method if you want to report the entire profit in the current year of sale.
You may elect not to use the installment method if you want to report the entire profit in the current year of sale.
Is the gain I realized on the sale of my car taxable?
Asked Friday, September 29, 2000 by an anonymous user
Yes. The gain on the sale of your car is taxable and reportable on IRS Schedule D. Losses on sales of cars used for personal use are not deductible.
Long term - Holding period
Asked Friday, September 29, 2000 by an anonymous user
The long term holding period is more than one year. The short term holding period is one year or less. The significance of this determination is that gains on long term assets benefit from lower tax rates.