thomas t
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OK. Capital gains occurr when you buy something, it increases in value, and then you sell it - such as antiques, pictures, jewellery, etc...
The government doesn't like the way that you can make money without actually doing anything, (Or at least, that you make money without giving any to the government) so it taxes you.
The tax you pay will be a percentage of the gain that you have made (calculated on the amount of profit that you made from the sale of the item - i.e. Sale price - Price you paid for it = gain).
The percentage of the gain that the government request varies depending upon what type of item you're selling, and how long you held on to it for.
Some items, such as your "Principal Private Residence" (Your main home), are not subject to the tax.
It should also be noted that the government aren't completely heartless - everyone has an annual exemption of (it used to be) £3,000. So unless the gain is greater than that, or unless you have more than one capital gain and the combined gain is more than that, then you may not have to pay the government a penny.
It obviously gets a bit more complex here and there (Such as for calculating the percentage you have to pay), but this is the basics. |
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musicman
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Songbird, to make it easy to understand, here it is: your earned income(w-2,1099) are taxed at a certain rate, well there are certain types of income that are qualified to be taxed at a lower rate of tax,(earnings from stocks, mutual funds, savings accounts, rental property income,antiques, land, etc.) you can obtain an accurate list, from any H&R Block office, or an IRS website,easily, the rest is up to ;you! |
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tony
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Basicaly, tha CGT is, what you must pay on gains that you make, by selling your assets. but not that simple!
actualy you must extract the time consumed of the asset (money wize) from the purchase value. if the selling is more then the result, then you must pay tax on this gain.
lets say:
c= the purchase value
v= the time that the asset was consumed ($)
r= the rest
s=saling price
r=c-v
the tax on the gain must be the % * (s - r)
hope that i made it clear! |
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suerye
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In the UK: CGT is a tax made on the gain made on the disposal of certain assets, eg stocks and shares, antiques, property and land. There are exemptions, eg if a house has been your only or main residence throughout the time you owned it, this is exempt.
The CGT is chargeable on the difference between the aquisition price (ie the amount paid for it, or the value at the time it was aquired if it was aquired free for instance under a will) and the sale price. There are lots of different reliefs according to the length of time the asset has been owned, whether its a business asset, as well as an annual exempt amount. Tax is chargeable at the taxpayer's highest marginal rate.
As other answerers have said, it is highly complex, but if you have trouble sleeping, there is info at www.hmrc.gov.uk.
If you think you may have a chargeable gain, first go and ask the tax office for advice and if they say you are liable, pay for one-off advice from an accountant. |
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~*WoodSmoke*~ ~Environment~ daBlogPound,Inc
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http://www.irs.gov/app/understandingTaxes/jsp/s_cool_stuff.jsp
Hope this helps. It can help you understand more about the entire tax structure thing......you can also type in Capital Gains, in the search box and get even more info!
good luck & bless |
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jim06744
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get a copy of schedule d and corresponding instrux, that will tell you everything you possibly need to know about it. as other answers already said, it is tax on realized gain or loss on sale of assets, typically stocks or mutual funds. all the details and rules (offseting gains versus losses, short v long term, etc) are in documents above and can be downloaded from irs website, also usually at least the forms are available at banks and libraries |
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Mark J
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For example if you buy a second home for £100,000 and sell it one year later for £140,000 there will be a gain of £40,000.
There is a threshold before you pay CGT and I think that is about £5000. So you will pay CGT on £35000
That is only a very rough example but I hope it helps. |
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CarVolunteer
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As you can see from the answers, the way the tax is calculated, if at all, depends on the country. The general idea is that if you sell something for more than it cost you, you owe taxes on it. If you are in the business of selling things (cars, food, soap, jewelry, or whatever) and do this regularly, it is called profit on your business. If it is stock, real estate, or something you bought for your own use, it is called capital gains. There may be cases where the difference is hard to see, but that is the idea. In the US, rates on long term capital gains are usually less than on "profit". The definition of long term (how long you owned the item) varies as the law changes. Right now it is 1 year.
As others have said, it can get complicated if you sell something you never bought, or real estate, or other special cases. |
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munch
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its huge topic.. generally speaking its tax levied while selling ur long term and short term assets. when u sold ur assets u ll gain profit.. the tax is on that profit.. if u sold ur long term assets ( i.e. > 1 yr u bought tat asset), it wil be taxble @ flat rate, if u sold ur short term asset, that profit will be included in ur other incomes and subject to tax @ slab rate which u fall into. u can claim some exemptions under some case.. u can please refer some good book - "students guide to income tax - by vinodh singania" |
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K
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In what respect? CGT is very complex. Basically it is a tax due on most assets sold by you, excluding your sole residence, and car. |
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Strotte
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Capital gains tax is tax paid on assets that you acquire other than by purchase. eg inheritances or gifts. |
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