Capital Gains & Losses
The most frequently asked tax questions related to Capital Gains & Losses
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Answer Tax QuestionsWhat is a Wash Sale ?
Asked Friday, September 29, 2000 by an anonymous user
A wash sale occurs if you sell stock or securities at a loss, and within 30 days before or after that sale, you buy or acquire (in a fully taxable trade or enter into a contract to acquire substantially) identical stock or securities. The deduction for the wash sale loss will not be allowed, and the basis of the stock will be increased by the amount of the previously disallowed loss.
Stock warrant conversion
Asked Friday, September 29, 2000 by an anonymous user
The exercise of your stock warrants is not a taxable event.
Prior year suspended losses - Installment method
Asked Friday, September 29, 2000 by an anonymous user
When you sell your passive activity interest at a gain, (using the installment sale method), the prior year suspended losses are not allowed in full.
You are allowed a prorated amount. They are only allowed in the same ratio as the gain recognized each year bears to the gain remaining to be recognized as of the start of the year.
Speak to your local CPA about your passive loss deductibility.
You are allowed a prorated amount. They are only allowed in the same ratio as the gain recognized each year bears to the gain remaining to be recognized as of the start of the year.
Speak to your local CPA about your passive loss deductibility.
Is the stock I received in a stock split taxable?
Asked Thursday, September 28, 2000 by an anonymous user
No. Your receipt of stock under a stock split in not a taxable transaction. When you eventually sell any of the stock , it is then a taxable transaction. It will be reported on IRS Schedule D.
Employee stock options
Asked Wednesday, September 27, 2000 by an anonymous user
If your stock option is granted under a employee stock option plan, the granting or exercise of the option is not included as income on your tax return.
You will report either the income or loss on IRS Schedule D when you sell the stock that you purchased by exercising the option.
Speak to your local CPA about the tax strategies with your options.
You will report either the income or loss on IRS Schedule D when you sell the stock that you purchased by exercising the option.
Speak to your local CPA about the tax strategies with your options.
What is a securities Short Sale?
Asked Sunday, August 27, 2000 by an anonymous user
A Short Sale, or selling short, refers to when a person sells a stock before he or she owns it.
The person wants the stock price to go down, so it can be bought back at a cheaper price.
When you sell short you must borrow money to cover the sale. Usually, the seller's brokerage firm arranges to borrow stock to make delivery to the buyer until the seller "closes" the position by purchasing stock and turning it over to the brokerage firm.
The person wants the stock price to go down, so it can be bought back at a cheaper price.
When you sell short you must borrow money to cover the sale. Usually, the seller's brokerage firm arranges to borrow stock to make delivery to the buyer until the seller "closes" the position by purchasing stock and turning it over to the brokerage firm.
What is a long term capital gain ?
Asked Friday, August 18, 2000 by an anonymous user
A long-term capital gain is any gain that you receive from the sale of stocks or other investment property which is held for more than one year. If you hold something for 365 days that is still considered short term. It has to be more than one year.
