CALCULATING CAPITAL GAINS TAXES ON THE PROFITABLE SALE OF STOCKS.

Slides:

Advertisements

Similar presentations

What is Bonus Shares? When the additional shares are allotted to the existing shareholders without receiving any additional payment from them, it is known.

Advertisements

Lesson 12 Sale of Stock & Other Investment Property.

Taxation in the UK JA Stenning Taxation in the UK Unit 6: Fiscal Policy.

F INANCING A B USINESS Chapter 8 1. S AVINGS T O I NVESTMENT Businesses, like consumers, have to finance purchases from time to time. They can borrow.

Investing in Stocks Chapter 12 Goals for Chapter 12.1 Describe the features of common stock and compare it to preferred stock. Discuss stock investing.

9.2 How to invest in corporations

I.N. Vestor is the top plastic surgeon in Tennessee. He has $10,000 to invest at this time. He is considering investing in Frizzle Inc. What factors will.

“How Well Am I Doing?” Financial Statement Analysis

Bond Basics. What is a bond? You've just loaned your neighbour $1,000 so that he can renovate his home. He's promised to pay you 6% interest each year.

What is the Bid price of the stock? Bid Price – represents the highest amount that an investor is currently willing to pay to acquire a board lot of shares.

ECONOMICS STUDY GUIDE. Investing – saving in a way that earns income Diversification – distributing funds among a variety of investments to minimize overall.

7.6 Stocks Calculate the cost of stock purchases

What is a Stock???  A Stock represents a share in the ownership of a company.  By purchasing a stock you become a shareholder/part owner of that company.

apple apple tree rents apartment building apple apple apple tree apple tree rents rents apartment building apartment building interest interest GIC GIC.

Chapter 18: Measuring and increasing profit. Profit vs. Profitability Profit – the difference between the income of a business and its total costs. Profit.

Financial Aspects of a Business Plan

3.1 Sources of Finance Chapter 18 Part 1.

Chapter 3 & Web Appendix 3A

Capital Gains Tax (GCT) is a tax levied on any capital gain (profit) made on an investment. Laws relating to capital gains seem to continually change.

Lesson 9.5 Investment Taxes July 2011Copyright © … REMTECH, inc … All Rights Reserved1 Introduction The largest investing expense you will have.

L EARNING, E ARNING, AND I NVESTING FOR A N EW G ENERATION © C OUNCIL FOR E CONOMIC E DUCATION, N EW Y ORK, NY W HAT ARE M UTUAL F UNDS ?

4.2 Sources of Finance (where can companies get money?).

Today’s Agenda Wrap up Chapter 3 and Appendix 3A  Personal Income Taxes  Taxation of Investment Income  MVA and EVA Chapter 4: Ratio Analysis 1.

GOALS BUSINESS MATH© Thomson/South-WesternLesson 7.7Slide 1 7.7Mutual Funds Calculate the total investment in a mutual fund Calculate the amount and rate.

L EARNING, E ARNING, AND I NVESTING FOR A N EW G ENERATION © C OUNCIL FOR E CONOMIC E DUCATION, N EW Y ORK, NY W HAT ARE M UTUAL F UNDS ? L ESSON 6.

© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin Chapter Thirteen Financial Statement Analysis.

Rate of Return Lesson 1 Calculating the Rate of Return on Stocks and Bonds.

BUYING AND SELLING STOCK INVESTING IN STOCKS 12.2.

The McGraw-Hill Companies, Inc. 2008McGraw-Hill/Irwin CHAPTER 13 Financial Statement Analysis.

Financial Statements Business Management.

CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 17-2 Calculating Earnings Performance and Efficiency Analysis.

Percent and Problem Solving: Sales Tax, Commission, and Discount

Financial Accounting Dave Ludwick, P.Eng, MBA, PMP, PhD Chapter 18 Accounting for Investments.

Shafiqah Shariff 10C. 1. Your wage is $70,000 per annum from which you pay tax; calculate the tax to the nearest dollar... Tax Subdivision% Tax Payable.

FINANCIAL SECURITIES: MARGIN ACCOUNTS CIE 3M1. AGENDA OPENING A MARGIN ACCOUNT OPENING A MARGIN ACCOUNT MARGIN ACCOUNTS: A DEFINITION MARGIN ACCOUNTS:

Percentages. Percentages are just fractions Percentages are just fractions. They are designed to describe these numbers differently,

Chapter 16 Investment Information and Transactions Lawrence J. Gitman Jeff Madura Introduction to Finance.

Copyright © 2011 Pearson Education, Inc. Managing Your Money.

What is a dividend?. Let’s say you bought an Investment property. You paid $400,000 and get $400/week rental income. (That’s $400x52 = $20,800 p.a.)

Using only a portion of the proceeds for an investment Borrow remaining component Margin arrangements differ for stocks and futures Margin Trading Example.

10/22/2015NJ Training TY Capital Gains & Losses (Including Sale of Home) Pub 17 Chapters Pub 4012 Tab 2 Module NJ 1.10.

Capital Gains and Losses Cassie Warren. Does capital gain count as income for that year on your taxes If your capital losses exceed your capital gains,

Intro to Bonds. Bonds 101 When large organizations (companies or governments) need to raise large amounts of capital – they often turn to Bonds. Bonds.

Evaluating Companies. Research: Products Earnings Debt Performance Consider: PROFITABILITY GROWTH POTENTIAL VALUATION.

Investment Vocabulary. Stock Market  A market in which the public trades stock that someone already owns; the buying and selling of stock.

4.2 Sources of Finance (where can companies get money?).

Sources of Finance Own funds Profits Loans Overdraft Hire purchase Leasing Selling assets Venture capital Shares Debentures Government Grants.

What is a mutual fund?  A pool of money that is invested in different securities (stocks, bonds, etc)  The money pool is invested on the investors behalf.

FINANCIAL STATEMENTS Business Management. Today’s Objectives  Interpret basic financial statements, including cash flow, income statement, and a balance.

©2011 Cengage Learning. Chapter 17 ©2011 Cengage Learning INCOME TAX ASPECTS OF INVESTMENT REAL ESTATE.

Sub topic and formula :  Percentage of increase, increase in value and final value.  Percentage of decrease, decrease in value and final value.  Profit.

Investment Companies  Net Asset Value (NAV)  (Total portfolio value - liabilities) / # of shares  Management is usually contracted to an outside firm.

Prepared by: Mathematics Department

Chapter 16 Investment and Personal Financial Planning.

 Wage is classified at level 3 ($35,001-$80,000)  70, ,001 = $34,999  34,999 x 0.30 (30c for each dollar over $35,001) = $10,  10,499.7.

SB-Lesson 12.1: Markup and Discount Terminology Selling Price - The price retailers charge customers Cost - The price retailers pay to a manufacturer.

9.02 Summarize the investing in stocks and bonds. T H17.

Math in Our World Section 8.6 Stocks and Bonds.

Chapter Nine Financial Statement Analysis © 2015 McGraw-Hill Education.

Working capital is the money a business needs to pay its short term expenses. These include: Expenditure such as staff training Raw materials or stocks.

COMPUTING STOCK RETURNS AND CALCULATING ROI RETURN ON INVESTMENT.

Chapter 12 Investing in Stocks. Evaluating Stocks  Characteristics of stock Public corporation – company whose stock is traded openly Stockholders (shareholders)

Financing and Producing Goods. People deposit savings to get interest. Financial Institutions loan $ to businesses Trucks Equipment Plant Computers Businesses.

Paycheck Basics Personal Finance. Income Unearned Income “An individual's income derived from sources other than employment, such as:”incomesourcesemployment.

“How Well Am I Doing?” Financial Statement Analysis Chapter 17.

Personal Finance JOHN MALL JUNIOR/SENIOR HIGH SCHOOL.

Investing in America Aim: How do Americans invest their money? ERHSMr. Graboski.

CALCULATING COMPONENT PERCENTAGES

Chapter 1-part 3 Business Taxes.

Presentation transcript:

CALCULATING CAPITAL GAINS TAXES ON THE PROFITABLE SALE OF STOCKS

COST BASIS BEFORE YOU CAN CALCULATE HOW MUCH CAPITAL GAINS TAX YOU OWE, YOU MUST FIGURE OUT YOUR COST BASIS FOR THE STOCK COST BASIS: AMOUNT YOU PAID FOR THE STOCK PLUS ANY APPLICABLE COMMISSIONS FOR EXAMPLE: YOU BUY 1000 SHARES OF XYZ STOCK FOR $20,000. YOU PAY $1000 COMMISSION YOUR COST BASIS FOR THIS INVESTMENT IS $21,000 OR $21 PER SHARE

CAPITAL GAINS TAX YOU WILL BE CHARGED A TAX ON THE SALE OF STOCKS IF YOU PROFIT YOU WILL ONLY PAY TAXES ON THE PROFIT PORTION OF YOUR SALE (SALE AMOUNT – COST BASIS) YOU WILL PAY A LARGER PERCENTAGE OF TAXES IF YOU’VE OWNED THE STOCK FOR LESS THAN ONE YEAR THIS IS KNOWN AS SHORT-TERM VS. LONG TERM CAPITAL GAINS

CAPITAL GAINS: SHORT TERM VS. LONG TERM WHILE THE ACTUAL PERCENTAGES VARY BASED ON EACH INDIVIDUAL INVESTOR’S INCOME AND TAX SITUATION, WE WILL USE THESE GUIDELINES FOR OUR EXAMPLE: SHORT TERM CAPITAL GAINS: TAXES ON PROFIT FROM SALE OF STOCK OWNED LESS THAN 1 YEAR LONG TERM CAPITAL GAINS: TAXES FROM PROFIT FROM SALE OF STOCK OWNED MORE THAN 1 YEAR

CAPITAL GAINS: SHORT TERM VS. LONG TERM IN OUR EXAMPLE: INVESTOR SELLS HIS 1000 XYZ SHARES FOR $34,000 PER SHARE AFTER 4 MONTHS $34,000 SALE PRICE - $21,000 COST BASIS = $13,000 PROFIT BASED ON HIS PERSONAL SITUATION, THIS INVESTOR WOULD BE LOOKING AT THE FOLLOWING CAPITAL GAINS TAX RATES: SHORT-TERM FEDERAL 28% NY STATE 6.65% LONG-TERM FEDERAL 15% NY STATE 6.65% FIND THE AMOUNT OWED IN TAXES TO FEDERAL AND STATE GOVERNMENTS DETERMINE INVESTOR’S ACTUAL PROFIT