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capital gains and losses

Adjusting Your Withholding and Estimated Tax Payments

If you regularly have a large tax payment or large refund, you should review and adjust your withholding to be more efficient.

Minimize taxes by adjusting your portfolio

Since the markets have had some downturns lately, now could be a good time to make some adjustments to your portfolio, rebalancing and the like, that may help to minimize taxes. In doing so you can possibly get a bit of advantage in your tax bill from a loss you’ve experienced in your investments. If you have taxable accounts, that is, accounts that are not tax-deferred (like IRAs or 401(k) plans) when you sell your investments there is capital gains treatment on your gains and losses. If you have losses and gains in your taxable account, when you realize these losses and gains by selling the holdings, your losses are subtracted from the gains, and if the result is positive (net gains), these gains are taxed at the preferable long-term capital gains rates. I say this is preferable as the rate is less, often much less, than ordinary income tax […]

Capital Gains and Losses and Your Tax Return

When you own certain kinds of assets and you sell them, you may incur a capital gain or loss that is applicable to your income tax preparation.  If the original purchase price plus applicable expenses associated with the asset (known as the basis) is less than the proceeds that you receive from the sale of the asset, you have incurred a capital gain.  On the other hand, if the basis of your asset is greater than the proceeds from the sale, you have incurred a capital loss. Capital gains are taxable to you, using a separate tax rate – and capital losses can be deducted from your capital gains for the year.  Excess capital losses (above your capital gains for the year) can be used to reduce your income by up to $3,000 per year, carried forward until used up (or for your lifetime). The IRS recently produced their Tax […]

Capital Gains and Losses on Your Tax Return

When you sell things, including stocks, bonds, real estate, collectibles, and other items, you may either gain money or lose money from the original purchase price.  This gain or loss is known as a capital gain or capital loss, and (with some exceptions) you will report these capital gains or losses on your income tax return. Often the gains are afforded special tax rates and treatment, and the losses provide additional benefits as well.  This entire area of tax reporting can be confusing and there are special rules that you need to follow in order to make sure that you report these transactions correctly and pay the appropriate taxes. The IRS recently published their Tax Tip 2013-28, which details Ten Facts about Capital Gains and Losses.  The actual text of the Tip is below: Ten Facts about Capital Gains and Losses The term “capital asset” for tax purposes applies to […]

Selling Your Home? IRS Offers Tax Tips

With the real estate market beginning to turn around a bit, many people are buying new homes and selling their old homes.  Recently the IRS published their Summertime Tax Tip 2012-14, which outlines several tips you should be aware of when selling a home. The actual text of the Tax Tip is presented below: Ten Tax Tips for Individuals Selling Their Home The Internal Revenue Service has some important information for those who have sold or are about to sell their home.  If you have a gain from the sale of your main home, you may be able to exclude all or part of that gain from your income. Here are 10 tips from the IRS to keep in mind when selling your home. 1.  In general, you are eligible to exclude the gain from income if you have owned and used your home as your main home for two […]

Year End Income Tax Planning

Image via Wikipedia Once you’ve reached the last month of the tax year, there aren’t a lot of things that can be done to minimize your income taxes.  But there are a few things that could be done. For example, you could double up your real estate taxes by prepaying next year’s tax during December.  Doing this with, for example, a $3,000 per year real estate tax bill could result in a reduction of tax for the year of $750 if you’re in the 25% bracket.  Keep in mind though, that you’ll have forked out this money long before it is actually due in most cases, and for the next year you won’t have this deduction available if you used it in this year. The same could be done with your charitable contributions – there’s no reason that you can’t make additional contributions to your favorite charities at the end […]

Capital Gains and Losses and Your Taxes

If you own taxable investment accounts, real estate, collectibles, or literally any item that can appreciate or depreciate in value, you’ve likely had to deal with capital gains or losses on your tax return.  (Actually, only if you’ve sold the item.)  But how much do you really know about capital gains and losses?  The IRS has published Tax Tip 2010-35 listing 10 Facts About Capital Gains and Losses – detailing what the IRS deems important about gains and losses and how they could effect your tax situation.  Following below the IRS’ list is some additional detail on treatment of capital gains and losses. 10 Facts About Capital Gains and Losses Almost everything you own and use for personal purposes, pleasure or investment is a capital asset. When you sell a capital asset, the difference between the amount you sell it for and your basis – which is usually what you […]