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Overview of Capital Gains and Losses

Capital Assets


Capital assets are items held for personal or investment purposes.  A capital asset can be anything except inventory, depreciable personal and real property used in trade or business, items created by the taxpayer's individual effort (such as a poem), accounts receivable, or certain government publications.  Capital assets include stocks and bonds held in the taxpayer’s personal account, a home, furnishings, vehicles, collectibles, gems, jewelry, gold, silver, etc.  Losses from personal use of assets are not deductible (for example, a home) unless they resulted from a casualty.


Holding Period


The holding period determines whether the capital gain or loss is long-term or short-term.  To determine the holding period, start counting on the date after the day the taxpayer acquired the property.  It includes the day the taxpayer sold the property.  Short-term property is property held one year or less.  Long-term property is property held for more than one year.  Short-term gains and losses are netted against each other as are long-term gains and losses.  To calculate the total net gain or loss, combine the net short-term gains or losses with the net long-term gains or losses.  The result is entered on line 16, Part III of Schedule D.

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Cathy Fisher

Common Cents Bookkeeping and Tax Preparation

Serving Henderson, NC, Buncombe County, Polk County, Transylvania County

E: cathy@commoncentsqbo.com

P: 828-595-2835

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