Ten Facts about Capital Gains and Losses
Ten Facts about Capital Gains and Losses
Source: IRS.gov
The term “capital asset” for tax purposes applies to almost everything you own and use for personal or investment purposes. A capital gain or loss occurs when you sell a capital asset.
Here are 10 facts from the IRS on capital gains and losses:
Almost everything you own and use for personal purposes, pleasure or investment is a capital asset. Capital assets include your home, household furnishings, and stocks and bonds that you hold as investments.
A capital gain or loss is the difference between your basis of an asset and the amount you receive when you sell it. Your basis is usually what you paid for the asset.
You must include all capital gains in your income.
You may deduct capital losses on the sale of investment property. You cannot deduct losses on the sale of personal-use property.
Capital gains and losses are long-term or short-term, depending on how long you hold on to the property. If you hold the property more than one year, your capital gain or loss is long-term. If you hold it one year or less, the gain or loss is short-term.
If your long-term gains exceed your long-term losses, the difference between the two is a net long-term capital gain. If your net long-term capital gain is more than your net short-term capital loss, you have a ‘net capital gain.’
The tax rates that apply to net capital gains are generally lower than the tax rates that apply to other types of income. The maximum capital gains rate for most people in 2012 is 15 percent. For lower-income individuals, the rate may be 0 percent on some or all of their net capital gains.
Rates of 25 or 28 percent can also apply to special types of net capital gains.
If your capital losses are greater than your capital gains, you can deduct the difference between the two on your tax return. The annual limit on this deduction is $3,000, or $1,500 if you are married filing separately.
If your total net capital loss is more than the limit you can deduct, you can carry over the losses you are not able to deduct to next year’s tax return. You will treat those losses as if they occurred that year.
Form 8949, Sales and Other Dispositions of Capital Assets, will help you calculate capital gains and losses. You will carry over the subtotals from this form to Schedule D, Capital Gains and Losses. If you e-file your tax return, the software will do this for you.
For more information about capital gains and losses, see the Schedule D instructions or Publication 550, Investment Income and Expenses. They are both available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).
If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page or our website at www.GROCO.com. Unfortunately, we no longer give advice to other tax professionals gratis.
To receive our free newsletter, contact us here.
Subscribe our YouTube Channel for more updates.
Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com. GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.
Alan L. Olsen, CPA, Wikipedia Bio
GROCO.com is a proud sponsor of The American Dreams Show.
The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business. Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.
The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.
They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more..
American Dreams discusses many topics from some of the world’s most successful individuals about their secrets to life’s success. Topics from guest have included:
Creating purpose in life / Building a foundation for their life / Solving problems / Finding fulfillment through philanthropy and service / Becoming self-reliant / Enhancing effective leadership / Balancing family and work…
MyPaths.com (Also sponsored by GROCO) provides free access to content and world-class entrepreneurs, influencers and thought leaders’ personal success stories. To help you find your path in life to true, sustainable success & happiness. It’s mission statement:
In an increasingly complex and difficult world, we hope to help you find your personal path in life and build a strong foundation by learning how others found success and happiness. True and sustainable success and happiness are different for each one of us but possible, often despite significant challenges.
Our mission at MyPaths.com is to provide resources and firsthand accounts of how others found their paths in life, so you can do the same.
Australian Sports and Best Practices: Insights from Ian Robilliard
Introduction of Interview with Australian Sports legend Ian Robilliard In this interview, Alan Olsen discusses with Ian Robilliard Australian sports and best practices and coaching insights Transcript: Alan Olsen Welcome to American Dreams My guest today is Ian Robilliard. Ian, welcome to today’s show. Ian Robilliard Thanks very much Alan. Really lovely to be…
The Tech Entrepreneur – Cory Warfield
Introduction: The Tech Entrepreneur, Cory Warfield shares business insights In this interview, Alan Olsen discusses success and achievements with Cory Warfield, famed tech entrepreneur. Transcript (software generated) Alan Olsen Hi, this is Alan Olsen and welcome to American Dreams. My guest today is Corey Warfield. Corey, welcome to today’s show. Cory Warfield Thanks so much…
Raising Healthy Children (and Grandchildren) in a Digital Age
Balancing Screen Time and Family Time. Written by Nathan Weller. The digital age has brought about significant shifts in society, perhaps the most important is how children are raised; especially how young people interact with technology. With the prevalence of smartphones, tablets, televisions, and computers, screens have become a ubiquitous part of our lives. Children…
Revolutionizing Athlete Development, Shona Eichorn CEO of NIAS
Transcript: Alan Olsen Hi, this is Alan Olsen and welcome to American Dreams we have today Shona Eichorn. She is the CEO of the Northern inland Academy of Sports. Shona, welcome to today’s show. Shona Eichorn Thank you very much for having me. I’ve very privileged to be with you all. Alan Olsen So Shona,…