Disclaimer and Warning - From Bob Parrish CPA, P.C.
Remember........"You can have everything in life you want, if you just help enough other people get what they want." -Zig Ziglar.
Email: bmsarasota@comcast.net 941-387-0926; 432-367-3465 email, USA Mail, Fax, telephone or request a meeting
Almost everything you own and use for personal purposes or investment is a capital asset. Examples are your home, household furnishings, and stocks or bonds held in your personal account. When you sell a capital asset, the difference between the amount you sell it for and your "basis", which is usually what you paid for it, is a capital gain or a capital loss. If you did not buy the asset yourself, refer to other topics for information about basis. You have a capital gain if you sell your asset for more than your basis. You have a capital loss if you sell your asset for less than your basis. Losses from the sale of personal-use property, such as your home or car, are not deductible.
Capital gains and losses are classified as long-term or short-term, depending on how long you hold the property before you sell it. If you hold it more than one year, your capital gain or loss is long term. If you hold it one year or less, your capital gain or loss is short term.
You must report capital gains and losses on Schedule D of Form 1040. You pay tax on capital gains just as you pay tax on other types of income. However, if you have a net capital gain, a lower maximum tax rate may apply. The term "net capital gain" means the amount by which your net long-term capital gain for the year is more than any net short-term capital loss. The highest tax rate on a net capital gain is generally 20%, 10% to the extent that, if there were no maximum capitol gain rates, the net capital gain would be taxed at the 15% regular tax rate. There are 3 exceptions:
If you have a capital gain on the sale of your main home, special rules apply. If you have a taxable capital gain, you may be required to make estimated tax payments.
If your capital losses exceed your capital gains, the excess is subtracted from other income on your tax return up to an annual limit of $3,000, or $1,500 if you are married filing separately. If your net capital loss is more than this limit, figure the amount of loss that can be carried forward to later years by using the Capital Loss Carryover Worksheet in the instructions for Schedule D.
This entire site is for educational or informational purposes only. You are not to use the forms, concepts, strategies, or knowledge without assistance from a professional. The author, the corporation, the ISP, Bob Parrish CPA, Bob Parrish CPA, P.C. or other parties related to those or this site do not guarantee or warrantee in any manner the suitability, usefulness, accuracy, timeliness, or results of any portions of this site, nor the links contained in this site which link to other areas. At times, information is taken from other sources and is believed to be accurate, but no verification or confirmation is performed. Furthermore, if any federal or state law invalidates a portion of this disclaimer, the other portions still apply. In addition, any allegations or actions are restricted to arbitration only and must be arbitrated by the Better Business Bureau in Sarasota Florida. Reading of these pages constitutes complete acceptance and agreement with all disclaimer provisions on all pages of this site. .......
Sunday, March 04, 2007 08:43 AM
See Also "Basis"
Capital Gains (Changes in 1997-1998)
