Taxes regarding long term and short term holdings of the same stock.?
605062
There are numerous ways to do cost basis.  The way that you are referrring to is the FIFO method, which is fine.  You might pay a bit more if the stock went up since your cost basis for the original shares is lower, but this would be offset by the long-term treatment.\n\nAs long as you keep track of which shares went where with the dates and the rest of the documentation, you're free to use that method.
277942
Understanding Capital Gains on Mutual Funds\nOften when tax season nears, mutual fund investors become confused. Why do we have to pay taxes on a fund that had a losing year? \n\nBy law, mutual funds must declare distributions each year. These distributions represent a profit the fund made when selling securities. Every year, usually in December, the fund will pay out these gains to the shareholders in the form of income dividends and/ or capital gains. \n\nEven in years with negative returns, mutual funds can, and must, pay out distributions. Capital gains are calculated by taking the price you sold the security for and subtracting your purchase price (cost basis). It doesn't matter if the securities that the fund held were doing poorly, all that matters is that the fund sold the security at a profit and must now pay out the profits in the form of a distribution, which is a taxable event for the shareholder. \n\nTo better understand how this could happen, imagine your fund bought a security in 1997 for $15 a share. \n\nSponsored Links\nHighest Savings Rate.\nCroft APY. No mins. No fees. No accounts.\nwww.double-fx.com\n\nIndia properties for sale\nExcellent properties available at great locations. Contact now!\nClassifieds.Sulekha.com\n\nCapital Gains Tax\nLooking for Capital Gains Tax? Get more information here.\nwww.toseeka.com\nAt the start of 2000, the security was worth a total of $30 a share, but the fund ended up selling the security for only $25 a share. This is a loss for the year, but an overall profit of $10 a share. Another possibility would be for the fund to sell the security for $35 a share, which is a gain even for the most current year, but the rest of the funds holdings went sour and created a losing year for the fund. This fund would still be forced to pay out capital gains on the security that they sold. \n\nWhat if the fund has capital losses? \n\nIt is possible that the fund did not make a profit off selling its securities. In the case of capital losses, the fund would not pay out a distribution (although they could pay income distributions). The fund would apply the loss to future capital gains. \n\nWhat if I signed up to automatically reinvest the dividends? \n\nThis is still considered a taxable event. Reinvested dividends are treated as cash payments. \n\nWhat if I bought the fund one day before the distribution was declared? \n\nSorry, but you are out of luck. It doesn't matter whether you held the fund for one day or for 10 years, you are still stuck with paying taxes on the distribution. This is why advisers usually recommend that you never buy a fund right before it pays a distribution. The distribution does lower the net asset value (NAV), allowing you to deduct it when you sell the fund, but paying the taxes sooner rather than later prevents you from gaining investment income on the amount that is taxed. \n\nWhat if my mutual fund is in an IRA or 401k plan? \n\nIf you find yourself in this situation, there is no need to worry. Taxes do not affect a non-taxable account. Uncle Sam will have to wait until you start taking money out of these accounts (the Roth IRA is an exception
1053167
Probably not.  It would be proof of holding stock at that particular period of time only.  A person should be able to get a record from the custodian of the shares to prove current ownership of shares.  Since shares are mostly dematerialized nowadays, they are held in your name by a custodial company.
289648
Your basis for any stock that you inherited is based on the closing cost of the stock on the day that it was traded to you.  For example if you received 100 XYZ stock on Feb 1st, 2004, which closed at $50 a share. Then you cost basis would be $5000.  \n\nMonteverde2\nUS Army Tax Preparer
779498
Assets are definitely part of the owner's equity and a fine way to reduce income tax.  I'm not sure what you mean by we "use our personal for the business" but you should have clear cut definite lines between personal and business.  If you get a car for the business, you have to differentiate between personal use and business use.  If you take it to the store occasionally for personal use, you cannot write off 100% of the vehicle and costs associated with it.  Actually, it works that way with anything the business may buy.  Shares in other companies might be a great way to go.  There would be no doubt as to who the owner was.  I use to own my own business and wrote off all kinds of stuff as a business expense.  Computers, paper, pens, trash cans, you name it!  Casual labor is another good one!  Good luck with that!
709679
The only way to reduce the taxes on the gain on real estate is to do a "Section 1031 Exchange".  The only problem is that you do not receive cash.  You received another piece of real estate.\n\nThere is not a way to reduce taxes on the sale of stocks at a gain.
714168
There is no “regular” tax implication when exercising stock options.  The regular tax kicks in when you sell the stock.\n\nIf the stock is sold more than 1 year after it was exercised AND more than 2 years after it was granted, then the gain from the grant date to the sell date is all capital gains.\n\nIf the stock is sold 1 year or less after it was exercised OR 2 years or less after it was granted, then the gain from the grant price to the Fair Market Value (FMV) when it was exercised is considered ordinary income not subject to FICA.  The remaining gain/loss is capital gain.  It is long term if the stock was held more than one year after it was exercised.\n\nAMT:\n\nAlternative Minimum Tax is different in that the exercise event DOES trigger tax.  The built-in gain from the grant date to the FMV at the exercise date is added to your AMT income.  When the stock is eventually sold, you will do two Schedule Ds...one for Regular Tax with the basis equal to the grant date price, and one for AMT with the basis equal to the FMV price.  Your regular gain will be larger than your AMT gain because your AMT basis will be larger.....you've already paid tax on some of your AMT gain whereas you didn't pay any regular tax on this gain.  Confusing, isn't it.\n\nWill you definitely have AMT when you exercise ISO stock?  Not necessarily.  Your AMT will be affected, but will it grow to the point where it will be higher than your regular tax?  It depends on other items on your return.  To get an idea of how much you can absorb, go back to your 2005 tax return and figure out your AMT and see how far it was below your regular tax.  This is an estimate of 2006, not a guarantee.\n\nIf ISO exercise does cause your AMT to be larger than your regular tax, of course, you will have to add the difference to your regular tax as you expect.  However, unlike other things that trigger AMT, ISO exercising is refundable.  What?  You get a credit for whatever additional tax you have to pay due to ISO exercising.  This credit carries forward to next year and, if not used up, carries forward to the next year.  It keeps doing this until it is used up.  This credit goes against regular tax until it drops to your AMT tax.\n\nComprehensive example:\n\n2006: Your normal regular tax is $20,000.  Your AMT is $16,000.  You exercise 10,000 shares with a FMV of $10/share with a grant price of $4/share.  You have to add 10,000 x (10 - 4) = 60,000 to your AMT income causing, let's say, $15,600 of additional AMT tax.  AMT is now $31,600 which is $11,600 more than your regular tax.  So, for 2006, your tax liability is $31,600, however, you get a credit of $11,600.\n\nIf in 2007, your regular tax is still $20,000 and your AMT is still $16,000, your tax is $16,000.  $4,000 of credit was used to lower your regular tax down to your AMT.  Your credit now drops to $7,600.\n\nIf in 2008 you sell the stock for $20, your regular gain is 10,000 x ($20 - $4) = $160,000.  Your AMT is 10,000 x ($20 - $10) = $100,000.  Again, you figure out your regular tax and AMT and if the AMT is lower than your regular tax, you get to use the carry-over credit until it is used up.\n\nOf course, part of your basis is your brokerage fees, but to keep things simple, I ignored these.  If you sell at a regular loss or even at an AMT loss, the rules still apply, but you can only get $3,000 per year of loss to use against other income.\n\nHope this helps  :)
390413
Anything that has to do with the past/future submissions of your state/federal taxes should be kept for seven years.\n\nALSO.. another thing VERY IMPORTANT.. If you have stocks and have dividends each year and you pay taxes on THOSE dividends, keep the papers until you SELL or liquidate the stocks. You do NOT want to pay taxes on the gains in the year you sell the stocks IF..... IF you have been paying taxes on the dividends in the years past. The IRS tried to get me one time but.. I kept ALL the dividends earned and the tax papers proving that I paid taxes on them.. I kept some for 25 years.\n\nLight bills, cable bills, etc can be gotten rid of after a year
939062
There is little, if any, difference in the tax ramifications.  In the first place buying stock creates no taxable event - it simply establishes the cost basis, which is subtracted from the selling price to determine the capital gain.  The question has much more to do with ownership:  If it is in his name only then you won't get the stock if he dies it except by will.  If it is in both names as joint owners with the right of survivorship then the surviving spouse owns the stock and it does not have to pass via a will through probate.\n\nThe only reason I can think of to put it in his name is if it pays a dividend (which it probably does not) and you are the big income earner and you file separately.
909650
Yes you do. if you sold the shares and transfer the income. Also I think if you transfer the shares, as it would be treated as a sale at current market values
1125788
It is perfecly fine.  For wash sale implications, it prevents you from holding shares in a specific stock while claiming a tax loss for that stock in a 30 day period.\n\nFor example:  if I had a large gain in GOOG (and I didn't want to pay taxes on it) but I had a large loss in AMTD (but didnt want to sell it because I thought it was a value) I could sell the AMTD, and buy it back, claiming the loss on the first sell against my gain on the GOOG stock.\n\nSame for short selling except if the stock price goes up you claim the loss.
735662
If you are cashing out, then it would not make a difference if you sell before or after the distrubtion date. However, if you can wait till next year you can differ your capital gains tax.\n\nIf you are putting money into the fund then it is best to invest after the distrubtion date. Typically when a fund pays out (dividends & cap gains) the NAV (Price) drops; however, the number of shares you own increases if you selected for dividend/cap gain reinvestment. In other words,  your total account value will remain unchanged. However, the capital gain distrubtions may be taxable (If not in an IRA), and therefore, it is best to differ your taxes to next year (Assuming that you are in the same tax bracket next year)
656821
Only when sold at a profit.  If you sell at a loss you don't owe any tax on the transaction, and it might reduce your overall taxable income.  It's exponentially more complicated than that because gains and losses are treated differently based on holding period, the different kinds of gains and losses offset each other, some overall losses can reduce taxable income, and if you have too much loss you carry it forward into future years.  Congress ensured millions of dollars will go to tax accountants with that one provision, which is actually a comparatively simple slice of the monstrous tax code.
712359
No.  You don't owe federal tax by inheriting stock.  The only time you owe tax by inheriting something is when you inherit an IRA or other retirement plan AND make a withdrawal from it.\n\nWhen you inherit stock, you will have a taxable event when you eventually sell the stock.  Normally when you sell stock, you have to figure out if you have a gain or loss and then pay tax on the gain or get a tax break on the loss.  The gain/loss is the difference in what you got for selling the stock minus what you paid for the stock.  For inherited stock, your gain/loss is the difference in what you got for selling the stock minus the fair market value (FMV) of the stock when your parents died.  This is true regardless if the FMV is greater than or less than what your parents paid for the stock.  That's why it is good tax advice to sell all losing stock before you die and don't sell stock that has appreciated.\n\nSo, do your research now to figure out the FMV of the stock you inherited and write it down and keep it in your records.  Use this amount as the "purchase price" when you eventually sell the stock.\n\nState taxes may be different.  Some states tax inheritance.  You will have to do your own research for your state.  Your parent's estate may owe tax, but that is a different subject alltogether.
297224
For stock options, record as short term capital loss (assuming it's not a LEAP) on Schedule D, with the expiration date as the sale date and zero as the sale price. If it's an option on an ETF or Index, there are weird tax consequences, which you would neet to review at the IRS web site. \nThis is based on info from the IRS but not guaranteed. Suggest you talk to an accountant or the IRS.
791922
Preferred stock will either be quasi-debt (with fixed preferred dividends, but having some equity characteristics) or be quasi-equity (with floating preferred dividends and pronounced equity characteristics like super-voting rights, convertability).  \n\nIf it is the former, use the post-tax dividend yield (rather than pre- with debt because there is no tax shelter).  You can tweak the cost of preferreds up to account for the equity features.  \n\nIf it is the latter, treat it like common and then tweak it downward for the embedded preferrential features (e.g. super voting, convertable calls) and seniority over common. \n\nPreferred par will be noted in the footnotes. You don't need the underwriting costs (and will almost certainly be immaterial to your analysis).
257424
When selling a stock you can repurchase the same stock almost instantly.  However, for tax purposes, in order to recognize a gain or loss you can't buy the stock for 30 days after you sell it.  For example, if you see that ABC company stock has a $1000 loss and it is Dec. in order for you to claim the stock as a $1000 loss you can sell it before the end of the month and you shouldn't buy it back for 30 days in order to claim the loss.