The Capital Gains Blog

Archive for the ‘Long Term Capital Gains’ Category

Question: If Cap.gain tax treatment is as a trader, can I still get tax exemption out my long term mutual funds gain?

For traders I.T. is payable at normal applicable rates and there is no tax exemption from capital gain out of sale of equity shares for long term. But, will the benefit be available for mutual funds units sale held for long term (one year)?

Answer: Tax on short term capital gains from the sales of shares where you paid security transaction tax is 10% 10% (for AY 2008-09) and 15% (for AY 2009-10) while there is no tax on Long Term Capital Gains. In such cases if you hold shares for more than a year, you have a long term capital gain.

Read about Capital gains, computation of capital gains and income tax rates on capital gains: http://mytaxes.in/index.php?topic=30.0.

For all the available Exemptions from Capital Gains under Sections 54, 54B, 54D, 54EC, 54F, 54G, 54GA, read: http://mytaxes.in/index.php?topic=31.0.

Penn West Announces Its Results for the Fourth Quarter Ended December 31, 2009

CALGARY, ALBERTA–(Marketwire – 02/18/10) – PENN WEST ENERGY TRUST (TSX: PWT.UN – News ) (NYSE: PWE – News ) is pleased to announce its results for the fourth quarter ended December 31, 2009 Operations – Production for 2009 averaged 177,221 (1) boe per day exceeding our guidance of 171,500 to 176,500 boe per day (net of property dispositions of approximately 3,500 boe per day annualized …

Question: Tradition IRA (w/o tax break) vs index funds?

I exceed income limits for traditional IRA deduction but thought I’d open one to take advantage of long-term tax-deferred growth. However, a friend recommends investing in low-cost index funds in a taxable account, as capital gains taxes (currently) are only 15% and that withdrawls from an IRA later on will likely be at a greater rate than this (depending on my future tax bracket). Does this make sense? Is there something he’s not factoring in?

Answer: I assume you exceed the limit for both a deductible IRA and a Roth IRA contribution.

What your friend suggests makes sense for several reasons. If you invest after-tax money in an index fund, the gain is going to be taxed as capital gains. However, it will not be tax-deferred, the gains will be distributed annually. Some of your gains are going to be short-term (taxed as ordinary income) and some long term (taxed at a maximum of 15%). You will have the flexibility to sell some of the fund and not pay a penalty.

There are other factors to consider in deciding between a nondeductible traditional IRA and an after-tax investment. In a nondeductible traditional IRA, any eventual withdrawals of the gain will be taxed as ordinary income. If your tax bracket at retirement is higher than the capital gains rate, you are paying more tax from the IRA.

Your age is also a factor. If you have enough years to let your IRA sit, eventually the period of tax-deferred growth is going to be a better deal for you than an after-tax investment (but it may be decades depending on your particular tax situation).

There is an option available for the next couple of years that is worth considering. You can contribute your $4k ($5k if age 50 or older) to the IRA, and then in 2010 you can roll it over, tax-free, to a Roth IRA regardless of your income. The income limits for a Roth rollover will be lifted for 2010 only, unless extended. Then as long as you wait five more years, qualified distributions from the Roth IRA will be tax-free.

New law allows Calif. to trim inmate population

California will begin to reduce its prison population by about 6,500 inmates over the next year under a state law that takes effect Monday.

Lec25 | 8.01 Physics I: Classical Mechanics, Fall 1999

A Look at 2010 and Beyond

Consumers cut back on a lot of things during an economic downturn, but they can only reduce their consumption of food and household products so much.

ONC Panel: Insite Into Emerging Policy

Riding in stock market may be characterized as jumping in your own pitfall. You do not know what to expect in there and you just desperately jump in for the sake of having an unprecedented decision. But did you know that you have options before advancing in? Stock markets continue to fluctuate swiftly over the years. Investors continue to risk their time, money, and resources consigning in share market or stock trading even if it is highly erratic compared to any other market. There are no tangible formulas and safe method of trading in stock markets. One should know how to analyze, be careful with investment decisions and focus on the long term goals.

Others view trading as a dauntless game. It is a mere gambling and risking of one’s resources to bargain for greater results sooner or later. But rather, it is a matter of having proper strategies that must be considered to reap results in the end. Short-term trading is one of the trading strategies you must likely consider. It is a specific method in which the time duration between entry and exit is planned within a duration of few days to few weeks. Timing is important when entering, exiting and or riding in a certain market trend. It will measure the amount of gains or losses, and the success or failure you will have. Volatility, Volume, and Trend, these are the key factors you must watch out while venturing in short-term trading. Stock markets are going up and down, or stagnant. You must be aware of its changeable nature so that you can plan out your strategy in advance. Determining the volume of buyers and sellers in and for the stocks during a period of time is fundamental. Planning your strategy will depend on the past and future trend of the market. Is it high or low? A buyer’s market or a seller’s one? It is also very important to eliminate emotional biases. Self-control must be possessed in dealing with stock markets so that you can have confidence in the strategy and its operating characteristics. It is essential to have a plan, stick to it and monitor the changes in the stock market every minute.

These factors are detrimental in the loss or gain of your market. Finding Short Term Traders Many individuals and companies offer short term trading methodology that are specially designed to be applied in the trend of stock markets. This market indicators are coded to broader market situations and represented by charts and graphs based on mathematical calculations. A prolific Australian firm named The Chartist offers a short term trading method known as Power Setups. This method have low risk trades including specific buy and sell points on both the ASX and US exchanges. The Power Setups apply technical analysis using pattern recognition to produce swing trading candidates. It identifies new trades each and every day, as well as provide trade management advice for open positions. Professional traders offer valuable insights, straight to the point guidance, and major trading ideas. High volume and professional traders can save time every day and manage the ever developing opportunities of your own stock trading. Visit www.thechartist.com.au and start a reliable short term trading method.

Taking the long-term view

Morningstar Fixed Income Fund Manager of the Year, Bruce Corneil, senior vice-president, fixed income, Beutel, Goodman & Company Ltd. Ten years in the future is a long time to be making predictio…

World Currency; Tea Parties; More Americans fear Great Depression

Question: How much is the tax on Long Term Capital Gain In India?

How much is the tax on Long term capital gain (especially gain from mutual funds)? Is there any way to minimize this tax?

Answer: Long term Capita Gains is Gains arising out of sale of investment held for more than a year.

For equity (shares of listed companies) – No tax on Long Term Capital Gains

For Equity MFs (MFs investing more than 65 % in equity) – No tax on long term capital gains.

For Debt MFs (MFs investing less than 65 % in equity) – There are two options. First – flat 10 % on LT Capital Gains. Second – 20 % with indexation on LT Capital Gains.

Hope the info is useful.

What can investors learn from a dreary decade?

Two bear markets have sent investors reeling but have also taught us some sound long-term strategies.

How To Avoid A Capital Gain