The reading level for this article is All Levels
Almost everything that you own in your house, home, or in life can be referred to in the long run as a capital asset. The IRS is very interested in your capital assets because they like to tax the full gains on those assets as they appreciate in value. Unfortunately, you do not get to claim any loss of capital assets on anything such as stocks or other investments.
For the most par you report the capital gains tax by reporting gains or losses on all capital assets by subtracting the amount you pair for it by the price that you sold it for. These are easily pointed out in your 1040 tax form on your returns.
These can also be broken down into long term or short term in the eyes of the capital gains tax. The classification comes down to how long you’ve owned the asset before selling. If it has been less than a year it is considered short term. Anything longer than this is usually considered a long term for the capital gains tax. Each situation requires a different payoff and bracket for the capital gains tax.
In better news when considering capital gains tax, you generally pay less for the tax when compared to income tax rates. For the 2009 tax season the general rate will be 15%, however, some will be hit with a 28% capital gains tax rate. You can also deduct losses up to $3,000 a year.
