2011, 2012 IRS Federal Capital Gains Tax Law Information

A capital asset is considered anything that you use for investment, pleasure, or as personal use. If you decide to sell any of your capital assets, then the difference between what you paid and the amount you sold it for will be your capital gain or capital loss.

It is required by law to report any capital gains but you may only deduct capital losses on investment property and not on any loss of personal property.

Tax Information on Capital Gains and Losses:

• You will need to report any gains or losses on Schedule D; this amount will need to be transferred to Form1040, on line 13.

• Your Net capital gain is the amount of your net long term capital gain that is more than your net short term capital loss.

• If you have your property for more than one year than it will be considered a long term capital asset. If you own your property for less than one year then it will be considered short term capital property.

• The tax rates on your capital gains are normally less than your income is taxed.

• If your capital gains are less than your capital losses, you may deduct this loss up to $3,000.00 if you are married filing jointly and $1,500.00 if you are filing single.

You will be taxed on all capital gains federally but you may also be taxed by your state as well. There are different ways to help offset the capital gains taxes so we recommend using some kind of tax preparation software such as TurboTax Online, since there are many rules that will need to be followed.

Please visit TurboTax Online if you have any capital gains or losses. TurboTax is your online source for questions regarding capital gains.