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Capital Gains Tax 2014

Here’s what You Should Know about Capital Gains Tax 2014

Did you sell certain assets such as stocks or bonds during the tax year? If so, you’ll need to report it on your tax return as a capital gains.  The tax you pay on it will be dependent on the type of capital gain it is and your income tax bracket.

As of 2013, the capital gains tax rate has become significantly more complicated. Fortunately, RapidTax is here to help clarify how much you’ll need to pay in capital gain tax. We’re also here to help you report your capital gains; both short term and long term.

Difference Between Long Term & Short Term Capital Gains

You may incur capital gains if you sell a certain asset such as;

  • stocks
  • bonds
  • property owned & used for personal purposes
  • property owned & used for investment purposes

Do note however; not all capital gains are the same. The IRS divides capital gains into two categories; short-term and long-term. Short-term and long-term capital gains are taxed differently. Before learning the capital gains rates, you’ll first need to know the difference between the two;

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Capital Gains Tax 2014

Capital Gains Tax 2014 remains almost the same as last year’s tax.

The fiscal cliff deal, officially known as the American Taxpayer Relief Act of 2012 increased Capital Gains Taxes in 2013.  The 2014 Capital Gains Tax rates remain almost the same from last year.

For those new to issues of taxation, the IRS defines a capital gain this way:

Almost everything you own and use for personal or investment purposes is a capital asset. Examples include a home, personal use items like household furnishings, and stocks or bonds held as investments. When a capital asset is sold, the difference between the basis in the asset and the amount it is sold for is a capital gain or capital loss.

There are two different types of capital gains:

  • short-term capital gains
  • long-term capital gains

2014 Tax Return Coupon

 

A short-term capital gain results from selling an asset held for one year or less. A long-term capital gain results from selling an asset held for longer than one year.

This distinction is important because each are taxed differently. Continue reading “Capital Gains Tax 2014”

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How to Report Capital Gains with the New IRS Form 8949

In the biggest 2011 tax change, the IRS adds a new capital gains form to fill out along with Schedule D

Starting with 2011 taxes the IRS has all new rules for reporting capital gains, complete with a new Form 8949 [Sales and Other Dispositions of Capital Assets]. Basically you have to list on Form 8949 all the transactions that would previously have been reported on Schedule D [Capital Gains and Losses] or the now defunct Schedule D-1 [Continuation Sheet for Schedule D].

You may be surprised to learn the number of things that are considered capital assets – in fact almost all of your personal and investment property qualifies as a capital asset including your home, household furnishings, stocks, and bonds.

When you sell these assets, the difference between the price you bought them at and the price you sell them for is a capital gain (or loss).

All your income from capital gains you have to report – that’s where Form 8949 comes in. Continue reading “How to Report Capital Gains with the New IRS Form 8949”