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Amount Realized for Gain or Loss Determination – Paul Gaulkin CPA

person holding for sale sign

The amount realized from the sale or disposition of property is the sum of any money received plus the fair market value of other property received in the transaction. This does not include any amount received from the purchaser as reimbursement for real property taxes which are treated as imposed on the purchaser. However, it does include amounts representing real property taxes which are treated as imposed on the seller, if they are paid by the purchaser. The amount realized … Read more

Capital Asset Definition – Paul Gaulkin CPA

Keyboard with keys saying stocks and bonds

The IRS does not actual define for taxpayer what it considers to be a capital asset. Instead, the IRS specifies what it considers not to be a capital asset. The IRS defines a capital asset as any property held by the taxpayer except: 1. Stock in trade or other inventory property or property held by the taxpayer primarily for sale to customers in the ordinary course of a trade or business. 2. Depreciable property used in a trade or business. … Read more

Controlling Capital Gain Rates

When it comes to investment taxes, understanding and managing capital gains is the key to minimizing the tax impact of your investments. The tax impact of a specific investment depends both on the payer’s tax bracket – the rate used to calculate your ordinary income tax the length of time the investment was held prior to sale. Controlling Capital Gains Basics The tax is based on the difference between the original cost and the selling price. The difference reflects the … Read more