Capital Gains Tax Guide
Incentive Stock Options
Incentive stock options enjoy favorable tax treatment compared to other forms of employee compensation. Income from incentive stock options is taxable for federal income tax (including the alternative minimum tax), but are not taxable for Social Security and Medicare taxes. Upon meeting all the criteria for a qualifying sale, income from...
Reporting Capital Gains and Losses on Schedule D and Form 8949
Starting in 2011, American taxpayers will use new Form 8949 along with Schedule D to report income from the sale of stock, bonds, mutual funds and other investments. Form 8949 will detail various transactions, with summary totals transferred to Schedule D.
Capital Gains Tax: Essential Tax Tips for Capital Gains & Losses
A capital gain is the difference between what you paid for an investment and what you received when you sold that investment. If you made a profit on the investment, then you have a capital gain. If you lost money on the investment, then you have a capital loss. Covers record-keeping, calculating capital gains and cost basis.
Foreclosures are treated as the sale of property for tax purposes. Homeowners going through a foreclosure will need to calculate their gain or loss for tax purposes, as well as consider any tax that might be due on the forgiveness or cancellation of debt.
Capital Gains and Mutual Funds: Calculating Capital Gains on Shares
Calculating capital gain or loss when selling shares of a mutual fund can be complicated. Essential information about capital gains distributions, calculating mutual fund cost basis, and figuring capital gains or losses.
Wash Sale Rule on Capital Losses
If you buy the same stock within one month of selling that stock for a loss, your loss will be disallowed under the Wash Sale Rule. The loss is not gone forever, the disallowed is added to your cost basis in the new stock position.
Adjusted Basis Definition
Definition of "Adjusted Basis": the net cost of an asset after adjusting for various tax-related items.
Cost Basis Definition
Definition of "Cost Basis": the original price of an asset, such as stocks, bonds, mutual funds, property, or equipment. Cost basis includes the purchase price and any associated purchase costs.
Sample Mutual Fund Cost Basis Spreadsheet
Sample spreadsheet for keeping track of actual cost basis in a mutual fund using the specific identification method of accounting.
Wash Sale Rule
A wash sale is selling an investment at a loss and repurchasing the same (or very similar) investment within a short period of time (30 days before to 30 days after selling at a loss). Wash sales result in a deferral of the loss for tax reporting purposes. Wash sales can be avoided through careful investment planning.