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Capital gains tax

From dKosopedia

Captial Gains Tax

Capital gains taxes are levied whenever an individual sells an asset that has appreciated in value. The individual is then taxed on the difference between the selling price of that asset and their original cost.

For example, if you buy an asset for $60,000, and sell that house for $260,000, the $200,000 gain will be taxed.

If you own the asset for less than one year, you will owe short-term capital gains at the ordinary income tax rate.

If you own the asset for longer than one year, you tax rate depends upon your income and the type of asset you sold.

Current Capital Gains Tax Rates (as of May 30, 2004)

Stocks, Bonds, and Mutual Funds

For example, if you buy 100 shares of Microsoft at $25 in 1999 and sell it at $30 in 2002, you would have a capital gain of $500. Assuming your in the 25% tax bracket, that gain would be taxed at 15%, so you would pay $75 of your $500 to Uncle Sam and put the rest of your $425 in your pocket.

Real Estate owned as investment

There's some more complication on real estate investments due to depreciation and possible improvements.

Collectables and Small Business Stock


As always, this information is not authoritative. Please consult your tax advisor before acting on any of this information.

-Kilroy 10:25, 30 May 2004 (PDT)

Retrieved from "http://localhost../../../c/a/p/Capital_gains_tax.html"

This page was last modified 00:13, 3 July 2006 by Chad Lupkes. Based on work by Andrew Oh-Willeke and dKosopedia user(s) Kilroy. Content is available under the terms of the GNU Free Documentation License.

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