The Capital Gains Blog

Archive for the ‘Questions about Capital Gains’ Category

Question: How tax treatment of capital gain reduces the real gain?

In 1993 your bought a house for $3.000.000, and sold it in 2007 for $7.500.000. During this period of time your economy had been experiencing 115 % increase in price level. How much the tax treatment of capital gain reduces the real gain you earn if the corresponding tax rate is 20%?
Could you explain how you actually get it and do all the math for a single person no married one?

Answer: The gain is $4,500,000. Either or $500,000, if married filing jointly, or $250,000, otherwise, is exempt. This leaves either $4,000,000 or $4,250,000 taxable. Therefore, the tax is either $800,000 or $850,000. The tax treatment reduces the real gain by $800,000, if married filing jointly, or $850,000, otherwise. Inflation (the increase in price level in the general economy) also reduces the real gain, but you asked only for the amount of reduction that is due to taxes.

DGAP-News: SAF-HOLLAND starts 2010 on a positive note

Dissemination of a Corporate News, transmitted by DGAP – a company of EquityStory AG. The issuer / publisher is solely responsible for the content of this announcement.

Question: Tax liability applicability on salary income and short term capital gain?

I was employed part of the year 2009-10 and got about Rs.1.4 lac as salary and I was deducted about Rs.18000 tax and deposited by employer. During 2009-10, I made profit of about Rs. 3 lacs as short-term capital gain (equity/stock). How much is tax liable from both part employment and CapGain and which challan/bank to use for paying tax before 15th Mar-2010. I am also paying home loan EMI.
Thanks

Answer: On your salary Tax liability is NIL ( because it is less than 160000.00 per annum)
On STCG Tax is 15% of Rs 300000.00
Iyour EMI interest portion is deductible and principle portion is deductible only upto Rs 100000 along with others savings like PPF, GPF or NSCs etc. from your salary income.
but no deductions are allowed from STCG, challan form 280

A fix with sales tax doesn’t last forever

Grand Island, a regional shopping draw, turned to the sales tax in the 1980s as a financial fix for the city coffers.

Capital Gains Tax Instructions on Stocks for 2009, 2010

Question: If you sell your business is it a capital gain/loss or is it treated as income for tax purposes?

Answer: The sale of a business is a highly complex transaction, involving the transfer of assets, inventory, goodwill, etc. Each has it’s own tax treatment so professional assistance is mandatory for all parties involved in the transfer. Most business transfers will involve both capital gains (or losses) as well as some component of ordinary gains (or losses).

Treasuries Find Greenspan’s Canary Fainting in Mine (Update2)

March 29 (Bloomberg) — Former Federal Reserve Chairman Alan Greenspan’s warning that rising yields on government debt will drive up American borrowing costs is resonating with the world’s biggest bond traders, who say this month’s losses in the market for U.S.

Silver Thursday Plus 30

Gold saw a gain of $6.23 in Asia before it fell back off in London and saw a loss of $5.20 at as low as $1094.50 by a little after 8AM EST, but it then rose to a new session high of $1107.89 by early afternoon in New York and ended with a gain of 0.40%. Silver fell over 1% to as low as $16.712 before it also climbed back higher in New York and ended near its noontime high of $17.125 with a gain …

Question: What does “Reduce income and capital gains marginal tax rates” mean?

I’m studying for a final and one of the things on it is Reagan’s economic policy, which includes the quote above. I don’t really understand this at all; I don’t know if it’s the phrasing or what… Can anybody help me out?

Answer: It means that he reduced tax rates so taxpayers got to keep more of their own income and paid less in taxes. In theory, this type of move is believed to stimulate the economy by providing more money for people to spend on their own wishes and desires. If it works really well, then this increased spending causes more people to be hired, and more profits to be made, so that overall the economy grows.

Sometimes it has the effect of lowering government tax revenues, and can result in budget cuts for government programs, which takes government spending down (and might offset the increase in consumer spending).

Income taxes are taxes paid on regular income – like the W-2 you get each your, or self-employment income that is reported by a business owner.

Capital gains taxes are taxes paid on an asset that was held for investment and it increased in value – such as a share of stock, or a house you bought and sold later at a profit.

Budget 2010: ten ways to beat the stealth taxes

Once again, the Government is going for the jugular as it attacks your income and your wealth. But there are ways to fight back.