Long-term capital gain

Long-term capital gain

A profit on the sale of a security or mutual fund share that has been held for more than one year.

Long-Term Capital Gain

The profit one realizes by selling a position one has held for longer than one year. For example, if one buys a stock or bond and sells it five years later for more than what one paid, this is considered a long-term capital gain. The government wishes to encourage long-term investment, and as such, long-term capital gains are usually entitled to preferential treatment for tax purposes; that is, they are taxed at a lower rate than most other income. See also: Long-term capital loss.

Long-term capital gain (or loss).

When you sell a capital asset that you have owned for more than a year at a higher price than you paid to buy it, any profit on the sale is considered a long-term capital gain.

If you sell for less than you paid to purchase the asset, you have a long-term capital loss.

Unlike short-term gains, which are taxed at your income tax rate, most long-term gains on most investments, including real estate and securities, are taxed at rates lower than the rates on ordinary income. Currently, those rates are 15% if you're in the 25% tax bracket or higher, and 5% if you are in the 10% or 15% bracket.

You can deduct your long-term losses from your long-term gains, and your short-term losses from your short-term gains, to reduce the amount on which potential tax may be due. You may also be able to deduct up to $3,000 in accumulated long-term losses from your ordinary income and carry forward losses you can't use in one tax year to deduct in the next tax year.

long-term capital gain

A gain on the sale of an asset held for more than one year.Currently longterm capital gains enjoy reduced tax rates over those imposed on short-term capital gains.

References in periodicals archive ?
Example 1:A, a financial-aid-eligible student, sells appreciated stock for $10,000 and generates $1,000 long-term capital gain.
Three IRS letter rulings offer joint inventors reassurance they will not lose IRC section 1235's benefits (allowing long-term capital gain treatment on a subsequent transfer, rather than ordinary income treatment) if they transfer their patent rights to a limited liability company (LLC).
If a corporation can convert dividends into a stockholder's long-term capital gain, it may benefit stockholders.
However, the goal of clients who choose to not do a tax-free exchange is generally to pay tax at lower long-term capital gain rates, 15 percent maximum federal rate, rather than at ordinary income tax rates, 35 percent maximum federal rate.
When employer securities are sold after distribution, any gain realized is long-term capital gain to the extent attributable to NUA not taxed at the time of receipt.
However, the net realized appreciation is taxed as a long-term capital gain when the securities are sold.
1231 business assets that, if sold by the donor, would result in long-term capital gain recognition (i.
However, when the restrictions lapse in January 2007, Tim can sell the shares and recognize a long-term capital gain of $16 per share subject to the new tax rate of 15 percent.
Any remaining net short-term capital loss would then be applied to reduce any net long-term capital gain from each of the tax rate groups, starting with the 28% group.
Further, estates must continue to report each beneficiary's share of the net short-term and net long-term capital gain for the entire tax year on Schedule K-1.
NQO gain, unlike ISO gain, is not eligible for long-term capital gain treatment, except for stock appreciation after it is exercised.
In earlier years Jean might have solved this problem by selling enough stock to yield a long-term capital gain of $4,500.

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