Capital Gains Tax

Capital gains tax information and solutions for your investments
By Trisha Schulz Most commonly applied to real estate investments, capital gains tax can also be assessed on any asset your business owns that you sell for more than the purchase price you paid. Capital gains tax is not assessed until the property or asset is sold. While you own it, the asset can increase in value at no extra cost to you.

That's why timing is so important when figuring your capital gains tax information. If you can time a large capital gain and offset it with a large capital loss, you can minimize your tax burden.

Consider the following capital gains tax information:

1. The IRS classifies capital gains tax into two different types: short-term or less than 1 year and long-term or more than one year.

2. Even stock that you liquidate must have been owned for a year or you will be responsible for paying a higher tax.

3. You may want to consider selling smaller assets and saving larger capital gains for a time when it's completely financially sound. This can be an inconvenience but can save you at the end of the year on your tax bill.

Figure your capital gains tax information

You have many different options in financial software when it comes to tracking your investments and subsequent capital gains. Some brokerages will let you download your investment information into your own personal software or they may track your costs for you for an extra fee and at your request.
Try:  Browse the features available from Tools for Money's net worth calculating software. Or utilize DRIP Wizard investment and tax tracking software.

Find capital gains tax calculators to help you with the math

For a quick look at your financial picture, many calculators exist online to help you crunch the numbers from figuring out the capital net gain to estimating your tax.
Try:  Use the simple calculator offered by Moneychimp to crank out some fast numbers to estimate capital gains tax. Plug in the appropriate numbers, and AMBAR Financial Group provides detailed calculations including net adjusted basis of selling property, capital gain based on the sale of the property, the projected capital gains tax due and any equity available for exchange.

Work with a capital gains tax provider who can minimize the blow

A tax consultant can help in a strategy to limit your capital gains tax liability by timing purchasing and selling of certain assets. It's always best to avoid a large capital gain until you can even it out with a similar capital loss. To project your capital gains tax, list any assets you're considering liquidating and discuss the list with your advisor.
Try:  Hippensteel & Associates and Lalor O'Shea are two of your options when it comes to seeking professional advice on minimizing your capital gains tax burden.

• You can always keep purchasing throughout the year to offset capital gains tax. Investing in stock is a good strategy that many small businesses utilize.