This article will discuss the tax implications for wash sales stock rights, gifts, small business stock, non-business bad debts, and inheritances. This is a the second article in a series of three focusing on gains and losses. (Read Part I here)
Archive for Capital Gains
This article will discuss the general aspects of capital gains and losses, the brokers reporting to investors, how and where they are reported on Form 1040 and supporting schedules.
It is advantageous to have investment income in the form of long-term (held longer than one year) capital gains (LTCG) because they are taxed at a lower rate than ordinary income. For 2016, the net LTCG will be taxed at various rates depending on the tax bracket:
During February 2016, the beleaguered South African Minister of Finance, Pravin Gordhan made a serious attempt to balance government’s books. Being an election year, the increase in wealth taxes went down well with the grassroots support base of the ruling ANC.
The provisions of Section 179 – 186 Taxes Consolidation Act (TCA) 1997 examine the following scenarios:
- The departure of a disgruntled shareholder.
- The retirement of a controlling shareholder who wishes to stand aside and make way for new management/the next generation.
- Situations where one shareholder wants to continue carrying on the trade while the other shareholder would prefer to exit the business and the company has the necessary funds to buy back its own shares.
- Access to company surplus funds as part of succession planning
- An outside shareholder who initially provided equity finance but who now wants the return of that finance.
- A marriage break-up, etc.
Income Tax
The tax residence of the trustees is what determines the extent of their liability to Irish income tax. When reading an exam question, always pay attention to the residency of the individuals named as trustees. If you are told that all the trustees in the exam question are Irish resident then they are liable to Irish income tax on the worldwide income of the trust from all sources.
During February 2016 the beleaguered South African Minister of Finance, Minister Pravin Gordhan, made a serious attempt to balance government’s books.
Gordhan was called back after Minister Nene was removed from his position, by President Zuma early December 2015. The true reason for this politically motivated musical chairs, appointing three ministers in less than 4 days, remains a mystery. Point is Nene was removed and Gordhan had to step in and rescue the cash flow and ensure the country did not face junk status.
When faced with a large tax bill and the administrative burden of having to file Tax Returns in two jurisdictions, people always regret not getting professional taxation advice BEFORE they completed the transaction.
Over the past number of years I’ve been contacted by several Irish citizens returning home from the UK where they’ve lived and worked for a number of years.
In the majority of cases, these individuals have had difficulty selling their UK homes and, as a result, may have rented them out for a number of years until a suitable buyer was found.
Their main question they asked was “Do I have an Irish and a UK Capital Gains Tax Read More
Prologue: Tweet by Citizenship Lawyer – @expatriationLaw – Video: Carrick Talks Money: The tax issues facing Americans who sell Canadian homes fw.to/qZwKS8i – No tax free capital gain
If (U.S. Person) then (Mr. #FBAR Ms. #PFIC and Uncle #FATCA) = Few investment and financial planning opportunities).
Yes, it’s true. There are only three things that Americans abroad can “invest in” that do not Read More
Selling a property one has owned for a long period of time will frequently result in a large capital gain, and reporting all of the gain in one year will generally expose the gain to higher than normal capital gains rates and subject the gain to the 3.8% surtax on net investment income added by Obamacare.
Capital gains rates: Long-term capital gains can be taxed at 0%, 15%, or 20% depending upon the taxpayer’s regular tax bracket for the year. At the low end, if your regular tax bracket is 15% or less, the capital gains rate is zero. If your regular tax bracket is 25% to 35%, then the top capital gains rate is 15%. However, if your regular tax bracket is 39.6%, the capital gains rate is 20%. As you can see, larger gains push the taxpayer into higher capital gains rates. Read More
Last fall we wrote about the increased enforcement of the German Church Tax (German Church Tax Causes Controversy), in particular the enforcement of this tax on capital gains. The tax is levied by the state at 8-9% of the regular income tax for members of certain mainline churches – primarily Catholic and Lutheran church members. This tax is then passed on to the churches for use in their operations and charitable activities. The tax is only levied against registered members of Catholic, Protestant, or Jewish churches. The system does not rely on self-reporting as some churches have gotten rather aggressive against those who are alleged members of the Church but do not report being a member of a church.
As enforcement of the tax has increased, more and more church members are Read More
With careful planning, and provided the rules are followed, the tax code allows the home sale gain exclusion every two years.
Let’s assume you own a home, perhaps a second (vacation) home, or maybe are even thinking about buying a fixer-upper and flipping it. With careful planning, it is possible to apply the full home sale exclusion to all three of the properties.
Here is how it works. The tax code allows you to exclude up to $250,000 ($500,000 for married couples) of gain from the sale of your primary residence if you have lived in it and owned it for two of the five years immediately preceding Read More
Whenever you sell business or investment property and you have a gain, you generally have to pay tax on the gain at the time of sale. Under Section 1031 of the IRC, however, if you reinvest the proceeds from the sale in similar property as part of a qualifying like-kind exchange, the tax code provides an exception, and allows you to postpone paying tax on the gain. It is very important to note that the gain from a like-kind exchange is not tax-free; it is only tax-deferred. You will eventually pay the tax on the gain if and when you dispose of the new property acquired in the exchange.
To qualify under the Section 1031 nontaxable exchange, a trade must meet all six of the following conditions: Read More
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