Formula
Capital Gain = Sale Price - Cost BasisHow do I calculate the capital gain?
When calculating capital gains tax, it is important to take into consideration the difference between the cost basis of the asset and the amount you sold it for. This difference can be calculated using the following formula:
Capital Gain = Sale Price - Cost Basis
It is also important to note that capital gains tax can vary depending on the type of asset and the length of time you held it. It is recommended to use an online calculator or spreadsheet such as Sourcetable to accurately calculate your capital gains tax.
What is capital gains tax?
Capital gains tax is a tax on the profit an individual or business makes when they sell a capital asset for more than it was purchased for. This includes investments and personal property.
Who needs to know about capital gains taxes?
Anyone who sells a capital asset should be aware of the potential capital gains tax implications. It is important for everyone to understand the basic facts about capital gains taxes.
What types of assets are subject to capital gains tax?
Capital gains tax applies to investments and personal property, including home sales. However, there is an exemption for the single biggest asset many people have, which is their home.
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Key Points
How do I calculate capital gain?
Capital Gain = Sale Price - Cost Basis
Property acquired by gift, property acquired from a decedent, and patent property are exceptions
Capital Gain typically applies to the sale or exchange of a capital asset, such as stocks, bonds, or real estate. However, some exceptions exist such as when the asset is inherited, gifted, or when it involves a patent.
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