It’s my annual Taxes from A to Z series! This time, it’s Tax Cuts and Jobs Act style.
If you’re wondering whether you can claim home office expenses or whether to deduct a capital loss under the new law, you won’t want to miss a single letter. are realized from sales of capital assets that you have owned for more than one year. are realized from sales of assets that you have owned for one year or less.
Basis is, at its most simple, the cost that you pay for assets. The actual cost is sometimes referred to as “cost basis” because you can make adjustments to basis over time. When it comes to stocks, your basis is generally equal to the original cost of the shares; if you participate in a DRIP or other reinvestment plan, your basis is your cost plus the cost of each subsequent purchase/reinvestment subject, of course, to other adjustments for splits and the like.
At tax time, you’ll report your realized gains and losses on a Schedule D, and then transfer the results to the reconciliation page on your federal form 1040. even if the value of your shares went up and down significantly, if there's no sale or disposition, there's nothing to report. which is taxable; the rate of tax will be dependent on whether those gains or losses are long-term or short-term.
Under the TCJA, there are three long-term capital gains brackets, the same as before: 0%, 15% and 20%. However, before the TCJA, those brackets were tied to those for ordinary income; that is no longer the case. Now, brackets are based simply on filing status and income. For 2018, those numbers are:capital gains are still taxed at ordinary income tax rates. You can find the 2018 tax rates
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