Calculating Capital Gains on Investments

You'll need to calculate the gain or loss on your investments so you can report this to the IRS on Schedule D of Form 1040. I provide an easy to follow formula for calculating capital gain. Remember to keep any documentation you have to substantiate your numbers. Essential records you should keep include trade confirmations for the purchase and sell of investments, which should also show the commissions and other fees you paid to place the trade. You'll need these trade confirmations if you are audited.