Long-Term Capital Gain or Loss
What is a Long-Term Capital Gain or Loss?
A long-term capital gain or loss is the
How Does a Long-Term Capital Gain or Loss Work?
Taxpayers report capital gains on IRS Schedule D, but these gains are subject to different tax rates depending on whether they are short-term or long-term (and in some cases depending on the type of ). In the example above, if you sold the Company XYZ after a year, the IRS would consider your $400 a long-term capital gain and tax it at one of several flat rates. However, if you sold the Company XYZ after just three months, the IRS would consider your $400 a short-term capital gain and tax that $400 at your ordinary income , which varies by several factors, including which state you live in, and is generally higher than the long-term rate.
Why Does a Long-Term Capital Gain or Loss Matter?
An investor’s long-term capital losses offset all or a portion of his or her capital gains, lowering the investor’s tax bill. There is a limit, however, to how much the investor can offset. Investors should seek the advice of a competent tax professional to understand how affects specific decisions.sometimes
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.