Video instructions and help with filling out and completing Fill Form 8815 Losses

Instructions and Help about Fill Form 8815 Losses

Hello I'm Kenneth my senior and I'm the CEO and founder of integrated asset management wealth management and financial planning firm and today we're going to be talking about what constitutes a long-term capital gain that you must report on schedule d first off let me define what the IRS considers long-term and short-term gain long-term gain is any investment business or item held for profit or the intention of profit greater than one year if it's how less than one year it's often referred to as an ordinary income item even though it is held for profit it's considered an ordinary income item therefore if you have an investment that you were holding greater than one year one day it may qualify for the long term capital gains tax treatment now under the new rules with the IRS these will dictate what rate you pay which is mandated on your actual income so currently if you earn greater than a certain limit single or joint you may pay either the lower or if you exceed those limits the higher capital gains tax rates now here's a suggestion if you are taking capital losses those could be short-term or long-term those are generally netted out on your schedule d and they are put on your 1040 tax return now many people are very misinformed they have many losses but they don't want to realize those losses because they think that they are only entitled to three thousand dollars in a deduction let me clarify let's say that you bought a stock for fifty thousand and it is now worth twenty five thousand dollars you don't want to sell it because you don't think that you'll be entitled to the $25,000 deduction here's my suggestion if the stock does not have or whatever the investment is that much potential to grow you don't want to lose money against inflation sell the investment you will now be in title to the full twenty-five-thousand-dollar tax write-off but that's going to be limited by your capital gains now if in that particular year you have a twenty-five-thousand-dollar capital gain you can wash off the tax by using your $25,000 capital loss on the flip side let's assume you have no gain whatsoever you can take a three-thousand-dollar deduction but here's the gift you can take it against ordinary income which in most cases is going to have a much higher tax bracket than capital gains now the benefit is is if you had a twenty-five-thousand-dollar loss you may take the three thousand dollars year one and then next year you can do it again and you can continue to take that loss until you use up the entire $25,000 loss and again it's not a bad thing if I gave you the option of a deduction would you rather take the deduction against a game or against ordinary income always against ordinary income because it's going to be at a higher bracket so hopefully that helps you realize that if you have losses don't overlook them sometimes it will help you to realize those and take the deductions again I'm Kenneth similar senior have a great day you