Income Tax Service

Terry Hough

March 09, 2013 Newsletter

Ten Facts about Capital Gains and Losses

Here are 10 facts about capital gains and losses:

1. 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, and even your cars.
2. 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.
3. You must include all capital gains in your income.
4. You may deduct capital losses on the sale of investment property. You cannot deduct losses on the sale of personal-use property.
5. 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.
6. 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.’
7. 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.
8. 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.
9. 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.
10. We use Form 8949, Sales and Other Dispositions of Capital Assets, to help calculate capital gains and losses. Then we carry over the subtotals from this form to Schedule D, Capital Gains and Losses.

Our office is located at 5200 W. Market Street Greensboro, NC 27409 Phone: 336-852-9505 FAX : 866-616-0471 email:     taxservice@electrofile.com website: ElectroFile Income Tax Service

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Office Hours
Dates		Days	Open	Close
Tax Season	January 17 - April 17	Mon - Fri	9:00am	7:00pm
		Sat	9:00am	3:00pm
Non-Tax Season	April 18 - January 15	Mon - Thurs	9:00am	11:30am