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Gpartnerships alimonyawardslotterywinnings andprizes

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Unformatted text preview: om investments Interest income from banks, bonds etc. Dividends are paid by corporations to shareholders from after tax profits (most pay 35% tax) Individuals also pay taxes on these dividends, thus they are taxed twice but at a lower rate (0%,15%, or 20%) 16 Gross Income Gross Income Your gross income also includes Passive income from business activities in which you do not directly participate e.g. partnerships Alimony, awards, lottery winnings and prizes 17 Capital Gains (Losses) Capital Gains (Losses) Investments are called “capital” assets for example, Stocks and bonds Your house and other real estate Gains and losses on “capital” assets result in a capital gain or loss Short term: Held up to a year Long term: Held for more than a yearA year and a day 18 Gross Income Includes Net Capital Gains First segregate capital gains or losses into short term and long term Short term/assets held a year or less (taxable at ordinary rates) Long term/assets held more than a year (taxable at lower rates) All net capital gains are taxable, losses are limited to $3,000 (with a carry forward) Long term capital gains are taxed at 15% (20% for to...
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