The Capital Gains Blog

Archive for the ‘Long Term Capital Gains’ Category

Question: How do we balance fair pay/benefits against the ability of a company to make money?

Workers are entitled to fair pay and benefits. Companies have a reasonable expectation to earn a profit. How do we achieve these two things without losing our unions or business having to relocate overseas to stay competative? My own personal experience has been that the unions tie the hands of the company by having to many work rules. It should not take five people and eight hour shift to change a light bulb. That may be a little extreme but there are these kind of practices going on at Ford, GM and other union companies. These unions and companies are self destructing because unreasonable rules like this. I believe employees should recieve FAIR pay and benefits but at where is the line? At what point do unions push before they start hurting their job security over the long haul? Is short term gain worth giving up long term security? What do you think?

Answer: i would remind you of the working conditions and employee rights before the unions.
i will concede, that some reforms are necessary on behalf of the unions, but collective bargaining is a great tool for the working people.
you brought up ford motor co. they just gave their new CEO his first quarterly paycheck. after four months he got a check for twenty-eight million dollars. they complain about not making enough money, they’re closing plants, they’re laying off and buying out. you tell me, where do you draw the line? come on 28 m for 12 weeks work?

Nigeria : Chevron Earns $3.7 Billion in Fourth Quater

Lagos — Chevron Corporation reported earnings of $3.07 billion ($1.53 per share – diluted) for the fourth quarter 2009, compared with $4.90 billion ($2.44 per share – diluted) in the fourth quarter 2008. Earnings in the 2008 quarter included a gain of approximately $600 million on an upstream asset-exchange transaction.

Free Ebook Tells How to Invest Money for Long Term Gain

Question: Do 3 years for long-term Capital Gains Tax start from purchase of plot or completion of house construction?

I purchased a vacant plot of land on 1 May 2004, and the house construction got complete on 1 June 2006. When will I be eligible to sell the house + plot under long-term capital gains – is it 1 May 2007 (i.e., three years after I purchased the plot), or 1 June 2009 (i.e., three years after the house construction got complete)?

Answer: You can sell the plot on 2.5.2007 and the gains will become Long Term Capital Gains.

But, the cost of the site can only be indexed and the Long Term capital gains will apply for the cost of the site only. The cost of construction will be treated as improvements. Example is given below.

For Plot+House sold on 2-5-2007: for Rs.30,00,000/-

* 1-5-2004 Cost of purchase of site —Rs.10,00,000
* Cost of construction of house.(Say) Rs. 8,00,000
* Your cost of Site+House (10+8)…….Rs. 18,00,000
* 2-5-2007 Sold House say for ——- Rs. 30,00,000
* Your actual gain (30-18) ————– Rs. 12,00,000

* Tax calculations:
* Inflation index for :2004-05= 480
* Inflation index for 2007-08= 535 (Estimate)
* Indexation cost of Site: 10,00,000 x 535 / 480= Rs. 11,14,583
* Your cost as per inflation index. (11,14,583+8 Lakhs)=19,14,583
(Cost of site with inflation index+house 8 lakhs)
* Now your actual gain= 30 lakhs-18,14,583=10,85,417
* Tax on it= @20% + 2% EC.= Rs.2,21,425

If you sell the house on 2-6-09, then you can claim inflation index on construction cost ( 8 lakhs also)..

MasterCard Incorporated Reports Fourth-Quarter and Full-Year 2009 Financial Results

PURCHASE, N.Y.—-MasterCard Incorporated today announced financial results for the fourth quarter and full-year 2009. The company reported fourth quarter net income of $294 million, or $2.24 per diluted share, including an after-tax severance charge of $0.19 per diluted share.

Tibet The Kingdom of Lost Boy 1/6

CNH Closes Full Year 2009 With Positive Operating Result and Strong Cash Flow

BURR RIDGE, IL–(Marketwire – January 25, 2010) – CNH Global N.V. ( NYSE : CNH ) — Full Year Operating Profit of $373 million for Equipment Operations — Fourth Quarter EPS, before restructuring, after tax, of $0.20 — Equipment Operations exceed target with $1.2 billion reduction of Working Capital — Equipment Operations end year with $530 million net cash position — CNH Capital completes 15 …

Question: What is the tax rate for Long Term Capital Gains? And the tax rate for short term?

I have a few investments over a year old, and want to know how much taxes I’ll have to pay if I close out of these investments. I also want to know how much I’ll have to pay on a few short term. Please let me know the tax percentages. If this matters, I’m based in New York. Please include references.

Answer: The following is for Federal tax purposes only. I do not have a good grasp of NY State or NY City income tax law.

When a security (stock, mutual fund, bonds, etc.) is sold, the gain is considered long-term capital gain (LTCG) if it was held more than one year or short-term capital gain (STCG) if it was held for one year or less. Of course, you could also have a long-term Capital Loss (LTCL) or a short-term capital loss (STCL) if you sell for less than your investment or “basis”.

At the end of the year, you add all your gains and losses together. You will end up with one of the following situations:

1) If you have a net loss, you write it off against your other income up to $3000. So, if you made $50,000 on your W-2 and had a $2000 LTCG and a $7000 STCL, your total capital loss is $5,000 (+$2000-$7000). Of that, $3,000 will go against your regular income of $50,000 to give you an new income of $47,000. The remaining $2,000 loss will carry into next year and be combined with your next year’s capital gains/losses.

2) If you have a net gain composing of STCG and LTCL, the net gain (being short-term) is just like ordinary income and is taxed at your marginal tax rate. It is taxed just as if it were additional income in box 1 of your W-2.

3) If you have a net gain composing of LTCG and STCL, the net gain (being long-term) is taxed at 15% if your marginal tax rate is in the 25% bracket or higher, or it is taxed at 5% if your marginal tax rate is below the 25% bracket.

4) If you have both a LTCG and STCG, the STCG portion is taxed at your marginal rate (just like #2) and your LTCG portion is taxed at 15% or 5% (just like #3).

This is not a guess….I know for sure. Hope this helps

Monsanto Delivers on Q1 Guidance, Confirms Full-Year Earnings Per Share and Cash Flow Targets

Monsanto Company has delivered on its financial targets for the first quarter of 2010, which ended Nov. 30, 2009, and recommitted to its full-year guidance. Â With its quarterly earnings results today the company also announced its annual research and development pipeline update, showcasing a record-breaking 11 phase advancements.

Robin Hood or Robbing Hood? – Obama’s Neighborliness – Take from the Rich, Give to the Poor

Question: Why are short-term capital gains taxed at a higher rate than Long Term Capital Gains?

The explanation I’ve always heard is that it’s a policy of inducing investors to buy and hold, and that that policy is meant to reduce volatility. But that’s completely back-asswards: it reduces volume. That’s the LAST thing you want to do: volume enhances price stability. This principle is most of the reason we HAVE exchanges in the FIRST place!

Some people say that “easier money should be taxed at a higher rate” but how is it easier money? It just means you got it RIGHT – on BOTH ends of the trade, which, if you do this consistently, means you’ve done your homework – the OPPOSITE of ‘easy money.’ (I wish people understood this – my job is hard but it’s a lot easier than the research I need to do to invest well – studying the economy, the industry, the company’s financials, its customers, its suppliers – it’s extremely difficult).

Shouldn’t policy with respect to capital markets be written by people who have a clue how they work?

Answer: I agree with you 1000%… I was a daytrader in the 90s. The taxes on short-term trading NAILS you… I owed $157k in 2002 which was my all time high.

Anyways, to answer the question, it is about, like you said, trying to get you to keep your money actually in the market. It’s very similar to receiving penalties when you remove funds too early from 401ks, CDs, etc…

I’m with you though. Let me trade as much as I want on equal grounds and that will boost the economy and help the not-so-rich while also allowing me to make more money … the rich are the ones that can more afford to hold.

Bristol-Myers Earnings Beat Estimates on Sales Gains (Update2)

Jan. 28 (Bloomberg) — Bristol-Myers Squibb Co. said fourth-quarter earnings beat analyst estimates on better-than- expected sales of its Plavix blood thinner and its AIDS medicines and a lower tax rate.

François Grin – Mother-Tongue Education: The Economic View 6 of 6