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Capital Gains and Losses

As individuals and families are looking at their taxes, questions may arise around capital gains and losses. Capital assets generally include property you own for personal use or as an investment. This can include your home, car, stocks or bonds. To create better understanding around theses issues, here’s a list of ‘good-to-knows.’ 

1. Gains and Losses: Your capital gain or loss is the difference between what you paid for it (your basis)  and the amount you receive when the asset is sold. 

2. Deductible Losses: You are able to deduct the capital losses on the sale of an investment property, however; you can’t deduct losses on personal use property. 

3. Long and Short-Term Capital Gains/Losses: If you’ve held the property for more than one year, it constitutes as long-term. Short-term is one year or less. 

4. Capital Asset Tax Rates: Capital gain taxes generally depend on your income. The maximum net capital gain tax is usually 20%.

5. Tax Forms: You often will usually need to file Form 8949, Sales and Other Dispositions of Capital Assets, with your federal tax return to report your gains and losses breakdown. You also need to file Schedule D, Capital Gains and Losses with your tax return.

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Comment   |  4 years, 6 months ago from Denver, CO