Capital Gains Beginning Flashcards
1
Q
Steps to this point
A
- Income included for tax purposes
- What is deductible?
This gets us to TI - Apply rates to get to tax liability.
2
Q
Rates for OI
A
7 RATES for ordinary income
10,15,25,28,33,35,39.6
3
Q
Capital gains are taxed
A
at a lower rate
4
Q
Principal example of capital gain
A
Gain on sale of stock
5
Q
Taxpayers prefer (for income)
A
capital gains because of the preferential rates
6
Q
Taxpayers prefer (for losses)
A
Ordinary losses
7
Q
1211b- deduction on capital losses are
A
limited- deductible to the extend that you have capital gains + 3k OI
8
Q
Cant deduct capital losses to…
A
offset ordinary income
9
Q
Ordinary losses can offset
A
ordinary income & capital gains
10
Q
Overall taxpayers want… ___ gains and ___ losses
A
capital, ordinary
