2006-11-22 13:58:50 · 7 answers · asked by jefferson 5 in Business & Finance ➔ Taxes ➔ United States
You buy a piece of land for 100 000
Five years later you sell it for 130 000, you have a 30 000 capital gain.
2006-11-22 14:01:11 · answer #1 · answered by teef_au 6 · 0⤊ 0⤋
gains associated with the increase in value of capital. They are mainly of two types Short term capital gains and Long term capital gains. For Income tax purposes, Long term capital gains are taxed at a much lower rate. The reason being capital invested for a longer time does more economic good to the country. The same benefits are not normally given to Short term capital gains, because if the tax benefits were given, there would be more speculative activity.,
2006-11-22 22:31:20 · answer #2 · answered by curio 3 · 1⤊ 0⤋
Just as others have said... you purchase a property for 100k sell it for 150k you have a Capital Gain of 50k which you would have to pay Capital Gains tax on.
Now if you own a home for at least two years and have it as your primary residence you do not have to pay Capital Gains Tax to my knowledge.
2006-11-23 00:23:43 · answer #3 · answered by mi_ked 2 · 0⤊ 0⤋
Capital assets create capital gains.
Capital asset: is a property held by the taxpayer (whether or not it is connected with the taxpayers business, personal use assets, and investments) that is NOT any of the following:
ïInventory or property held primarily for the sale to customers in the ordinary course of business. What constitutes inventory is determined by the taxpayer’s business.
ïAccounts and notes receivables acquired from the sale of inventory or services.
ïDepreciable property or real estate used in business. Business fixed assets
ïCopyrights and creative works (works of authors, composers, and artists). Creative work or copyright given as a gift also not a capital asset.
ïU.S. Government publications
ïSupplies of a type regular used or consumed in ordinary course of a business.
2006-11-22 23:36:57 · answer #4 · answered by LiLi 1 · 1⤊ 0⤋
Proper grammar:
What ARE capital gains?
2006-11-22 22:00:27 · answer #5 · answered by Anonymous · 0⤊ 0⤋
It's what you capital has gained hence the name. Or to be clearer, its the difference in what you paid and sold an investment for.
If you buy a house for 100K and sell it for 200K your capital gains are 100K.
2006-11-22 22:03:01 · answer #6 · answered by Morgan W 3 · 0⤊ 0⤋
gains that are not taxed as ordinary income (interest, dividends)
b
2006-11-22 22:01:16 · answer #7 · answered by Anonymous · 0⤊ 0⤋