Chapter 17 - Taxes Flashcards
Long Term Capital Gains are taxed at
15% tax rate for most
20% for top earners
Long term capital gains are reported on
part ll of form 8949
Short term capital gains are taxed at
ordinary income tax rate
Short term capital gains are reported on
Part I of form 8949
Capital loses may be taken off up to
$3,000 against ordinary income. Additional is carried over to the next year and goes first against capital gains and then up to $3,000 against that years loses
For tax purposes sales are always treated as
FIFO unless otherwise specified by the settlement date
Investors in a short stock position are always considered
short term capital gains
Qualified cash dividends are taxed at
15%
Dividends from mutual funds and REITs are not qualified cash dividends and are taxed at orginary income
Foreign Companies will typically withhold
a portion of customers dividends and interest to pay foreign taxes, but they do not withhold capital gains
Stock dividends and taxes
Stock dividends are not treated as taxable but will lower the cost basis in the security
Corporate taxes from dividends
Only 50% of the dividend is taxable the other 50% is not
This does not include dividends from REITs
Options and holding periods
The holding period on a stock purchased by exercising a call option beings on the day AFTER the call is exercised
Cost basis of a stock includes
purchase price and all associated costs (commissions and fees)
Maximum Gift tax exclusion is
$17,000 ($34,000 for joint gifts)
ACRS does and does not use
Does use composite depreciation
Does not use component depreciation
