html website templates

Ajay Kumar, CPA


7 Quick Facts about Capital Gains/Losses

The term “capital asset” for tax purposes applies to almost everything you own and use for personal or investment purposes. A capital gain or loss occurs when you sell a capital asset.
 You must include all capital gains in your income. Here are 7 quick facts on capital gains and losses:
  • Almost everything you own and use for personal purposes, pleasure or investment is a capital asset. Capital assets include your home, household furnishings, and stocks and bonds that you hold as investments.
  • A capital gain or loss is the difference between your basis (usually purchase price) of an asset and the amount you receive when you sell it.
  • You may deduct capital losses on the sale of investment property. You cannot deduct losses on the sale of personal-use property.
  • Capital gains and losses are long-term (more than one year) or short-term, depending on how long you hold on to the property.
  • Tax rates that apply to net capital gain aregenerally lower than tax rates that apply toother income. These lower rates are called“maximum capital gain rates.” Net capitalgain is the amount by which net long-termcapital gain for the year is more than net short-term capital loss. The maximum capitalgain rates are 0%, 15%, 20%, 25%, and 28%. If tax is figured using the maximumcapital gain rate, and the regular tax computation results in a lower tax, the regular tax computation applies.
Ajay Kumar, CPA

 5 Villa Farms Cir;
Monroe Township,
New Jersey 08831, U.S.A.

Contact us



Cell: 908-380-6876
Fax: 908-368-8638