Question

I have a question about capital gains and losses Schedule D. Can you explain how to figure capital gains tax and report capital gains and losses on Schedule D?

Answer

Regarding capital gains and losses Schedule D and how to figure capital gains tax, subtract your property basis from the amount realized on the sale. Your basis in the property is the purchase price plus any commissions or fees paid on the purchase. The amount realized is the amount you received for the property minus any commissions or fees paid on the sale.

If your property basis is more than the amount realized, you have a loss. If your basis is less than the amount realized, you have a gain. For purposes of the capital gains tax rates, capital gains and losses only include the sale of capital assets that you’ve held for more than one year.

However, you must still report the sale of investment assets held for a year or less than a year as a short-term capital gain or loss. These are taxed as ordinary income.

 

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