Ten Facts About
Capital Gains and Losses
you know that almost everything you own and use for personal
or investment purposes is a capital asset?
Capital assets include a home,
household furnishings, and stocks and bonds held in a personal
When you sell a capital asset, the difference between the
amount you paid for the asset and its sales price is known as
a capital gain or capital loss. Here are ten facts you should
know about how gains and losses can affect your federal income
Capital Assets. Almost everything you own and use for
personal purposes, pleasure or investment is a capital asset
including property such as your home or car, as well as
investment property, such as stocks and bonds.
Gains and Losses. A capital gain or loss is the difference
between your basis and the amount you get when you sell an
asset. Your basis is usually what you paid for the asset. You
must report all capital gains on your tax return.
Net Investment Income Tax. You may be subject to the Net
Investment Income Tax (NIIT) on your capital gains if your
income is above certain amounts. The rate of this tax is 3.8
percent. For additional information about the NIIT, please
call the office.
Deductible Losses. You can deduct capital losses on the
sale of investment property. You cannot deduct losses on the
sale of property that you hold for personal use.
Limit on Losses. If your capital losses are more than your
capital gains, you can deduct the difference as a loss on your
tax return to reduce other income, such as wages. This loss is
limited to $3,000 per year or $1,500 if you are married and
file a separate return.
Carryover Losses. If your total net capital loss is more
than the limit you can deduct, you can carry it over to next
year's tax return.
Long and Short Term. Capital gains and losses are treated
as either long-term or short-term, depending on how long you
held the property. If you hold the property more than one
year, your capital gain or loss is long-term. If you hold it
one year or less, the gain or loss is short-term.
Net Capital Gain. If your long-term gains are more than
your long-term losses, the difference between the two is a net
long-term capital gain. If your net long-term capital gain is
more than your net short-term capital loss, you have a net
capital gain. Subtract any short-term losses from the net
capital gain to calculate the net capital gain you must
Tax Rate. The tax rates that apply to net capital gain
depend on your income but are generally lower than the tax
rates that apply to other income. The maximum tax rate on a
net capital gain is 20 percent. However, for most taxpayers a
zero or 15 percent rate will apply. A 25 or 28 percent tax
rate can also apply to certain types of net capital gain such
as unrecaptured Sec. 1250 gains (25 percent) and collectibles
Forms to File. You often will need to file Form 8949,
Sales and Other Dispositions of Capital Assets, with your
federal tax return to report your gains and losses. You also
need to file Schedule D, Capital Gains and Losses, with your
Please call the office if you need more information about
reporting capital gains and losses.
Need assistance? Help is just a phone call away at
SMEED CPA Adds Financial
Services To Help Clients With
Investments & Insurance
often we here at SMEED CPA are asked about financial issues
that impact our clients investments and their portfolios.
We always offered our opinion and suggestions but in order to
help our clients actually execute the changes we suggest,
SMEED has created a Financial Services division.
SMEED Financial Services, Inc. will be able to
work with both individual and business clients on their
investment portfolios and manage assets on their behalf.
SMEED Financial will include Michael Uadiale,
ACA, CPA, CGMA; and Pablo Blanco who has
recently joined SMEED and comes with over 18 years of
financial sales and advising experience with affluent
Watch your inbox and mail boxes for more specific information
on services SMEED Financial Services, Inc will make available
Would You Give Me Your
Feedback & Testimonial
on Our Hotline?
Hello it’s Michael Uadiale, CPA of
SMEED CPA Inc. We’ve just installed a toll-free
number that I would like for you to call and tell me how you
think we are doing as your CPA firm.
Just dial 800-609-9006
extension 3638 and follow the instructions. If we’ve
done a good job please let me know. And if we can
improve on anything, please mention that too.
Us Be Found on
Also as we expand our business,
we find more and more people are using
YELP and Google
to look for us by searching Brentwood accountant or
When they do this we want to
be FOUND on GOOGLE. One way you can help us
is to give us an
ONLINE REVIEW on our Google Maps/Places listing --->
or check us out at our YELP local listing
click here to go to our Google Listing for SMEED CPA and
click on the
YELP link to go there.
Scroll down to the Review area.
On either site it may say: Been here?
Rate and review
You will click on the Rate and
review link and then log in, then
give us a review!
You can choose between 1 and 5
STARS and write in what you think about the tax or accounting
work we have done for you.
It's that simple. Thank
you in advance for your help and cooperation!
As always you can call our offices if you have any
questions about these or any other accounting related issues, at
Regards, Michael Uadiale, CPA,
Managing Partner, SMEED CPA,