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This provision is said to give a taxpayer the "best of both worlds" as it allows the favorable capital gains tax rate on section 1231 property while avoiding the negative implications of capital loss treatment. Ordinary losses are 100% deductible, while capital losses are subject to an annual deduction limitation of $3,000 against ordinary income.
“If you buy a painting for $10,000 and then sell it for $25,000 the IRS taxes the capital gain of $15,000,” he said. “If the parent gives the painting to a child while living, then the child ...
One of the consequences of the brick tax was that some minor brick producers went out of business, forced to sell their stock to meet tax arrears. [8] It also had an effect on architecture, with many areas returning to the use of timber and weatherboarding in house construction, especially weather tiles to simulate brick work, known as ...
The oil depletion allowance in American (US) tax law is a tax break claimable by anyone with an economic interest in a mineral deposit or standing timber. [citation needed] The principle is that the asset is a capital investment that is a wasting asset, and therefore depreciation can reasonably be offset (effectively as a capital loss) against income.
You can sell your primary residence and avoid paying capital gains taxes on the first $250,000 of your profits if your tax-filing status is single, and up to $500,000 if married and filing jointly.
Tax implications of selling a house after 2 years. When deciding whether to sell, you’ll want to consider the potential tax implications as well. Selling before the two-year mark can be costly.
Depletion is an accounting and tax concept used most often in the mining, timber, and petroleum industries. It is similar to depreciation in that it is a cost recovery system for accounting and tax reporting: "The depletion deduction" allows an owner or operator to account for the reduction of a product's reserves.
In most cases, when selling your primary residence you can exclude $500,000 of the gain if you file as a married couple. If that's your situation, and you meet conditions to have the gain qualify ...