By
admin on Tuesday, February 12th, 2008 |
No Comments
In the financial world, a capital gain is a profit that results from the sale of a capital asset over its purchase price. Capital gains occur in real assets and in financial assets. Financial assets include stocks and bonds that are of our concern.
With an example, the answer of the above question can be resolved. Suppose you have purchased a stock 10 years back. Those stocks have grown-up in value over the years and at present you have decided to sell them. Your capital gain is the profit that you built in those stocks and includes the amount that is to be taxed.
It is a most unfortunate happening that you can’t avoid the capital gains tax altogether. You have to pay taxes on this part of this profit. However, if you want to take a portion away, then you can transfer some of the stock to your children. In this case, you are eligible to transfer up to $11,000 in stock to your children, but this should be transferred as a “gift” and you don’t need to pay the capital gains tax. If you are getting married, your spouse can do the same thus you can double up on the exemption. So, in these ways you can be exempted from capital gains taxes even if you have earnings from stocks and bonds.
[tags]stock,bonds,capital gains taxes[/tags]
By
admin on Sunday, January 27th, 2008 |
No Comments
A charge that is taxed over capital gains is called capital gains tax. If there is a profit that has been gained on the non inventory assets, there is a tax charged on them.
Such profits are usually made from selling of stock shares, bonds, precious metals and property. The capital gain is the remainder among the money received by selling the property or asset and the cost remunerated for it.
There are a number of cases where the veterans are exempted from paying the taxes. People who have served during the war period are exempted from paying the taxes. In case of the unmarried spouses, taxes are not required.
This exemption does not however, involve the taxes required for Town and County portion of the real property tax. Neither does it involve school taxes.
As regards the value of the exempted price, for a qualified residential property there will be a 15% reduction of its review value, and if combat duty can be shown by means of proper and authentic documents, a further 10% will be exempted.
If the veteran encountered a service-related disability mark, one-half of the disability score will be further added to the exemption. For all these, a maximum assessed value should be from $180,000 for Town and $120,000 for County.
By
admin on Friday, January 18th, 2008 |
No Comments
Capital gains are those that arise out of the sales or transfer of capital assets. You can obtain capital gains by selling any type of property, which includes stock in trade, consumables, raw materials, personal effects, agricultural lands, gold bonds and special bearer bonds. There are certain properties that cannot be transferred for property gains. Tax rate is more in case of short-term capital gain than in long-term capital gain.
In the income tax return form Capital gains tax has to be mentioned in column 18. Capital gains are primary of two type’s long term and short-term. Short term assets are those on which the owner had an ownership for more than 36 months. Long term capital gains include that ownership of which extends this period. In short term gains two types of tax slabs are applicable one is the 10% and 30%. The form consists of four columns which contain the details related to all types of capital gains that have to be cleared in each quarter. You need to inform the government if you have given advance tax on capital gains or not. Those who have earned capital gains in the last quarter, you can mention it.
By
admin on Sunday, January 13th, 2008 |
No Comments
Becoming a home owner teaches you to quickly learn the meaning of words like capital gains tax. It’s important to always know how this dollar amount can hurt you and you can manage around it.
Let’s say you purchased stock ten years ago. Those stocks have grown in value over the years and now you’ve decided to sell them. The profit that you built in those stocks is your capital gain and that amount will be taxed.
Unfortunately, avoiding the tax altogether is nearly impossible. You’re bound to pay taxes on the portion of this profit. But, if you want to take a chunk away, transfer some of the stock to your children. Parents are eligible to give up to $11,000 in stock to their children as a “gift” without paying the capital gains tax. Plus, if you’re married, your spouse can do the same essentially doubling up on the exemption. If you move more than $11,000 to a child’s account, then you’re liable to pay a gift tax, so be careful of dollar amounts when shifting stock.
Although getting out of taxes isn’t as easy as we’d like it to be, a small exemption is possibly. Check with your accountant before making any transfers. In 2008 many changes are anticipated to the laws that govern capital gains taxes, this would actually seek to make taxation almost mandatory despite the cash is spent to another asset acquisition. This will undoubtedly pose a problem in the long run.
By
admin on Monday, October 8th, 2007 |
No Comments
The key to understanding short term capital gains versus long tern capital gains is to first comprehend what is defined as the long versus the short term and hence both are taxed differently depending on what type your investment is considered to be. By legal definition the short term refers to any assets that have a holding (held in your possession) period is one year or less. These short-term capital gains are normally taxed at regular or ordinary income tax rates. On the other hand the long term holding period is defined as more than one year, even if it is just one year and a day. Longer term capital gains are not taxed at ordinary tax rates, instead the gains are discounted. Long term tax rates fall between 5% and 15%; this is determined by the individuals’ marginal tax bracket. The tricky side to this is how people view the holding period.
The holding period is based on the date of acquisition until the date of liquidation of the asset. Many investors attempt to extend the holding date to be charged at discounted rates. This proves a major problem too many short term investors as capital gains taxes will always prove a problem. Let us examine a very profitable practice of flipping properties. This is done quite easily; one purchases a property, repairs it and sells it for a marginal profit. Now if all calculations are not done properly then capital gains taxes can eat away at your profit margins. A truly common mistake. Let us assume Marge is a real estate flipper she buys a property and takes six months to rehabilitate it. A real estate agent takes two months to find a buyer and it takes another two months to complete the closing. If Marge made a profit upon sale that profit is considered capital gains for the short term and will be taxed at rates of almost 35% while if she kept the property for just 1 year and a day she would pay capital gains taxes at a rate of just 15%. This is a big chunk of anybody’s profits as this can severely affect bottom line earnings.
There is however a loophole but this is geared towards true investors who can cream several thousand of dollars from daily transactions in like kind. This uses the premise that the sale of an asset must be used to procure an asset of the same kind. So if you sold a car the profit must be used to purchase another car and so forth. A very nifty deal however this again is for major players and not those that exist on profits. If you can add your personal costs to construction costs then you will not have an issue in rolling over the revenue in short order deferring your capital gains taxes to a later date.
TRY ONE OF OUR RECOMMENDED PRODUCTS
[eminimall products="TELEVISION"]
