Investments and your capital gains or losses.

We have valuable information that can help you.

  • Tax Information
  • Mileage Deductions
  • Capital Gain Tax and Losses
  • Depresation
  • IRS 1031 Tax Exchange Rule

IRS Tax Information.

To be deductible, a business expenses must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.

 

2020 Standard Mileage Rates: for Business, Medical and Moving Announced.

Beginning on January 1, 2020, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 57.5 cents per mile driven for business use, down one half of a cent from the rate for 2019,
  • 17 cents per mile driven for medical or moving purposes, down three cents from the rate for 2019, and
  • 14 cents per mile driven in service of charitable organizations.

 

Capital Gain Tax and Losses: Capital gains and deductible capital losses must be reported on your income tax return. Items ranging from stocks to home furnishings are considered capital assets. When capital assets are sold, you experience either a profit or loss. Selling assets for more than you paid for them will result in a capital gain; selling them for less will result in a capital loss.

 

Capital Gains: The IRS identifies long-term capital gains as assets held for more than one year after purchase; short-term capital gains are assets sold within one year or less of purchase. Long-term capital gains have a lower tax rate than short-term. The tax rate could be as high as 37% for short-term gains and either 0%, 15%, or 20% for long-term gains. You may be required to make estimated payments if you have substantial capital gains.

 

Capital Losses: You can deduct capital losses up to the amount of your capital gains plus $3,000 ($1,500 if married filing separately). You may be able to use capital losses that exceed this limit in future years.

Be sure to report all of your capital gains and losses even if you can't use all of your losses in 2020.

 

2020 Capital gains are:

The profits from the sale of an asset — shares of stock, a piece of land, a business — and generally are considered taxable income. How much these gains are taxed depends a lot on how long you held the asset before selling.

In 2020 the capital gains tax rates are either 0%, 15% or 20% for most assets held for more than a year. Capital gains tax rates on most assets held for less than a year correspond to ordinary income tax brackets (10%, 12%, 22%, 24%, 32%, 35% or 37%).

Short Term Capital Gains Tax

is a tax on profits from the sale of an asset held for one year or less. The short-term capital gains tax rate equals your ordinary income tax rate — your tax bracket.

 

Long Term Capital Gains Tax

is a tax on profits from the sale of an asset held for more than a year. The long-term capital gains tax rate is 0%, 15% or 20% depending on your taxable income and filing status. They are generally lower than short-term capital gains tax rates.

 

Depreciation is an income tax deduction that allows a taxpayer to recover the cost or other basis of certain property. It is an annual allowance for the wear and tear, deterioration, or obsolescence of the property.

Most types of tangible property (except, land), such as buildings, machinery, vehicles, furniture, and equipment are depreciable. Likewise, certain intangible property, such as patents, copyrights, and computer software is depreciable.

 

In order for a taxpayer to be allowed a depreciation deduction for a property, the property must meet all the following requirements:

The taxpayer must own the property. Taxpayers may also depreciate any capital improvements for property the taxpayer leases.

 

A taxpayer must use the property in business or in an income-producing activity. If a taxpayer uses a property for business and for personal purposes, the taxpayer can only deduct depreciation based only on the business use of that property.

The property must have a determinable useful life of more than one year.