Introduction to Capital Gains and Losses

According to sec100-50, the net capital gain or net capital loss for the income year is

A capital expenditure is an amount spent to acquire or improve a long-term asset such as equipment or buildings. Usually the cost is recorded in an account classified as Property, Plant and Equipment. The cost (except for the cost of land) will then be charged to depreciation expense over the useful life of the asset.

Assets are things that a company owns that have value. This typically means they can either be sold or used by the company to make products or provide services that can be sold. Assets include physical property, such as plants, trucks, equipment and inventory. It also includes things that can’t be touched but nevertheless exist and have value, such as

Capital Gain – is the gain from the sale or exchange of a capital asset while capital loss is the loss from the sale or exchange of a capital asset. Spouse B's day trading resulted in a capital loss of $5000.00, of this only $3000 is able to offset the couples other income. The other 2000 is able

Every sale or disposition results in a realized gain or loss (unless, of course, the amount realized is equal to the adjusted basis). Most realized gains or losses become recognized gains or losses and are included on the taxpayer’s tax return and increases (or decreases in the case of a loss) the taxpayer’s taxable income and subsequent tax. However, there are some realized gains or losses that are excluded from income or deferred to a later time period.

The rule for Capital Gains & Losses is that when a capital asset is sold, the difference between the amount you paid for the asset and the amount you sold it for is a capital gain or capital loss.

A2c. Profit or Loss from the Sale of Property: The taxpayer couple sold personal and rental property for this tax period. Both sales have potential gains. However, the gain from the sale of the personal residence qualifies for exclusion up to $500,000 under Section 121 as they lived in and used the residence at least two of the five years prior to the sale. The gain or loss is calculated as the sale price less selling costs and adjusted basis of the property. Proceeds from the sale of the rental property are taxable because it is an income producing property and would be considered normal income. However, Section 1231 designates that exchanges of business property held longer than one year may be considered a long-term capital gain if there is a gain realized and any loss would be considered an ordinary loss. Any depreciation taken in past tax years will need to be recaptured in the tax year of the sale.

There are several circumstances that assets can be capitalized: Three main categories are land, infrastructure valued over $100,000, and intangible assets that cost of one million dollars.

2 (TCO 3) To economists, the main difference between the short run and the long run is that

What are the realized and recognized gains or losses from resale of the property in 2014?

| Taxpayers are allowed to offset net short-term capital losses with net long-term capital gains.Answer

Gold, Da Vinci paintings and a signed Cristiano Ronaldo jumper are all considered as ownership investment - provided that these are objects that are bought with the intention of reselling them for a profit. Precious metals and collectibles are not necessarily a good investment, but they can be classified as an investment nonetheless. Like a house, they have a risk of physical depreciation (damage) and require upkeep and storage costs that cut into eventual profits.

PRIME and IWS platform were both designed and maintained by the Quant team. The main architect behind both is John Jiang which creates a “key person” risk for the team and the firm. Sanjun was asked to expand his knowledge of both systems in 2017. He had successfully coordinated the knowledge transfer from John Jiang and today the team is fully confident that both systems can be supported by the Quant team without interruption.

As mentioned above, when an asset is sold it may be sold in excess of the owner’s basis. When this occurs the taxpayer may be taxed on the gain at the more favorable capital gains rate (typically around 15%). What was not discussed in prior modules, was the treatment of capital gains for corporations, treatment of capital losses for both individuals and corporations, and how the length of ownership impact the classification and tax treatment of assets upon their sale.

Assets can be hard goods such as computers and equipment, but can also be information and intellectual property.