5d - Gains & Losses Passive Losses

5d - Gains & Losses Passive Losses -...

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Individual Income Tax Online Lecture Series Presented by Akore Berliner, CPA
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GAIN / LOSS FORMULA $ Amount Realized $ Less: Adjusted Basis = Gain or Loss
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LOSSES Capital Gains / Losses From Sale of Capital Assets Taxed at capital gain rates Ordinary Gains / Losses From Business Operations From Sale of Ordinary Assets  (Inventory, Receivables) Taxed at Ordinary income rates Passive Gains / Losses From Passive Investments From Rental Property Taxed at Ordinary income rates 1231 Gains / Losses From Sale of Business Assets Gains are treated as Capital Losses are treated as Ordinary Recapture Gain Gain on property previously depreciated  Taxed at 25% rate
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WHAT IS PASSIVE INCOME OR LOSS?
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PASSIVE  INCOME Income from  trade or business  activities in  which taxpayer  does not  materially  participate  (i.e. work) Certain  rental  activities Passive Income is taxed at Ordinary Rates Passive income can be offset by: Passive Losses Active or Portfolio Losses Passive Losses are subject to limitations
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This note was uploaded on 02/01/2012 for the course ACC 2546 taught by Professor Dean during the Summer '10 term at San Diego State.

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5d - Gains & Losses Passive Losses -...

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