Capital Gain

Capital Gain is when you sell an asset for more than it cost you and make a profit and Capital Loss is when you sell and asset for less than it cost you, therefore making a loss.


In other words the Mr Macauber principal!

Wait for the stock price to be more than what you paid for it. For example you buy a stock for $5 and in two weeks it jumps to $10 and then you sell it, that is capital gain

The lifetime exemption was eliminated in 1997.

There is currently a new exemption that allows you to exempt up to $250,000 in capital gains ($500,000 if married filing jointly) if certain conditions are met and can be used as often as every two years.

I think you meant to ask whether "gifts" are liable to capital gains tax.

If it is a true gift within the meaning of the tax law (and not some sort of disguised payment or barter), there is no capital gain tax at the time the gift is given. There may, however, be a gift tax (which is a different kind of tax) on the donor.

If the recipient of the gift later disposes of the gift, that transaction may generate taxable capital gains for the recipient.

It is reported as income in the year of the sale. Your estimated payments, as well as your return for that year should reflect the tax on this.

An increase in the value of an investment

There is no one-time exemption. But there is an exemption you can take as often as every two years.

If you owned the house for two of the last five years and the house was your principle residence for two of the five years, there is a $250,000 exemption. If you file jointly and the house was also your spouse's principle residence for two of the previous five years, there is a $500,000 exemption. If you move for reasons beyond your control without meeting the time requirements, you may qualify for a reduced exemption.

The federal long term capital gains rate is 15% for most people.

For low income people in 2008 thru 2010, the rate is 0%.

The federal rate for short term capital gains is the same as the rate on ordinary income.

In addition, state income taxes may apply, which vary by state.

dividends are the payments made from the profits in which a person owns stock, and capital gain is the increase in value of a capital asset.

No, not in general

This is actually one of the biggest holes in the US tax law. The estate gets the stock at the value at the time of the transfer to the estate's name. The Capital gains are only on what occurred once it was transferred.

Yes, if the land was adjacent to your main home and was considered part of your home any gain on the sale of the land qualifies for the exemption under IRS rules.

For example, if you buy a farm with a home and 40 acres, and 12 years later you sell off 36 of the 40 acres but keep the home and four acres, the sale of the land qualifies for the exemption because it was part of your main home. If you also sell the main home within two years, then the gain on both sales will need to be combined to determine whether or not the exemption has been exceeded.

See IRS Publication 523.

Capital gain dividends also are called capital gain distributions. They're paid to you or credited to your account by such sources as mutual funds and real estate investment trusts (REITs). The Payer sends you Form 1099-DIV (Dividends and Distributions). The amount of the capital gain dividends are shown in box 2a (total capital gain distr.). These distributions are reported as long-term capital gains, no matter how long you've owned your shares in the mutual fund or REIT.

For more information, go to www.irs.gov/formspubs for Publication 550 (Investment Income and Expenses).

The capital gains tax is a tax on any profits that a person has made on the sale of an asset they own. For example, if you own stock in a corporation or you have bought a mutual fund and that stock or fund appreciates, it is known as a capital gain. When you sell that asset, it is taxed by the government.

What this means for the lower and middle classes, is that if you are saving for retirement (which you most likely are), then any extra money you have made in the stock market or other markets, the government is going to be taking a piece of it when you eventually make the sale.

You only owe tax on the capital gain.

A capital gain is an increase in the value of invested money eg the rise in the value of shares, the increase in value of land or property, the increase in value of a work of art, etc In the UK capital gain is taxable by the iniquitous Capital Gains Tax. The gain is only realised when the investment is sold. Tax can then be computed on the gain.

No it would be rental income.

In keeping with most accounting ideals: The reovery of basis on the item you are seeling for a gain would be an asset, listed as such on the balance sheet. The amount above basis, which becomes you gain, is expected income. Inheritance, presuming your just waiting for a distribution and the estate is settled, is also an asset. (If your just really still a beneficiary and the estate isn't settled, I don't think you meet the "all events" test to claim it as anything). I'm not sure what "regular" money coming in is, but it sure sounds like a source of income.

Typically, proceeds from life insurance policies are not taxable.

If it is a pension plan/IRA, or a business investment (a contract with a third party where you placed insurance on the third party for your benefit), proceeds even after death may be fully taxable as ordinary income.

However, if a life insurance policy, purchased in the usual matter as a personal expense, is cashed out (surrendered) and there is a lump sum payment of the surrender value, it is just like any other capital transaction. You pay tax on the difference between proceeds and the amount you invested over the years like any other capital asset with a capital gain or loss, presumably long term since there is no cash value for the first few years. You may also have ordinary income from interest or dividends which the insurance company might report on a 1099 int/div

You will receive a 1099 R that provides all the information you need - proceeds, taxable part and they go on 16a & 16b of your Form 1040. If the cash received is part of a viatical or any other type of settlement, there may be other considerations that improve the result.

15% for Long Term, Ordinary Rates for short term www.TaxMeThis.com

Vesting of your options does not produce income. Virtually always, they vest as you hold them anyway, (that is they become non-defaultable - yours). You pay tax on the gain you realize upon their sale. Actually, you don't pay capital gain tax by the way...it's worse...the amount you have as income upon sale (presuming a "cashless transaction" where you authorize the options to be exercised to buy the related stock at the option price and that stock to be sold for the market price, realizing a profit on the difference), is reported as employee compensation, that is ordinary income, on the W-2 your employer provides. Hence, it's taxed at ordinary, not gain rates. But that has to do with options not receiving dividends along the way too. You can't avoid the tax, but there may be someways, if you own other stock of the Co, that you want to maintain, to effectively make the deal get taxed at Cap gain rates, but it is situational and complex.

You should consult an attorney. My experience would indicate that until the child reaches the age of majority, the child can do nothing more than complicate your title. Answer Where are you from? Just because i am unsure how titles on a home could ever change having to pay capital gains tax.... In Australia each person has a "main residence" home which no capital gains tax would be paid if it was sold for a profit. If they owned more than one house then the others would be subject to capital gains.

Primary residences are basically exempt from tax on gain at sale...agreeably with considerations like replacement within 2 years and age of seller and having taken a 1 time break before.

And even without that, why you thing having 2, or 20 names on the title would change the amount of tax due 9it wouldn't, just how many people are responsible for it), I don't follow.

If you hold the asset for MORE than one year before you dispose of it, and you have a gain on the sale your capital gain would be a LONG TERM CAPITAL GAIN (LTCG)