Unformatted text preview: Capital Gains and Losses Short outline of capital gain and loss treatment When stocks and bonds are sold (or any capital assets) either gain or loss will result, and the gain or loss will either be long-term or short-term. If the item sold was held for more than a year, it will be long-term gain or loss. If it was held for one year or less, it will be short term. (Also, property inherited from a decedent is automatically long-term. For property received as a gift, the holding period of the donor is added (“tacked’) on to the holding period of the donee to determine whether the gain or loss from its sale is long- or short- term.) Accordingly, each transaction will result in an amount that is either long-term gain, long-term loss, short- term gain, or short-term loss. To determine the tax result, net all the long-term gains against the long-term losses. Also net the short-term gains against the short-term losses. If both “nettings” result in gains, the gains are taxed. The long-term gains against the short-term losses....
View Full Document
- Spring '11