Ten Important Facts About Capital Gains and Losses
Washington- Internal Revenue Service--Did 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 account. When a capital asset is sold, the difference between the amount you paid for the asset and the amount you sold it for is a capital gain or capital loss. Here are ten facts from the IRS about gains and losses and how they can affect your Federal income tax return. 1. Almost everything you own and use for personal purposes, pleasure or investment is a capital asset. 2. When you sell a capital asset, the difference between the amount you sell it for and your basis – which is usually what you paid for it – is a capital gain or a capital loss. 3. You must report all capital gains. 4. You may deduct capital losses only on investment property, not on property held for personal use. (Investment property would include use in your business) 5. C