Capital Gains 101

When you sell an asset or investment, your cost basis – the amount you originally paid for it – is subtracted from the sales price to determine your capital gain on the sale:

Price Sold At – Cost Basis (Price Paid For) = Capital Gain

Do you take this cost basis into account when it’s time to sell an asset or investment? If your last tax return included some surprises on capitals gains that you incurred during the year – and the related taxes to that capital gain – then you’re probably aware of the need to plan ahead when buying or selling assets or investments.  It’s even more important in light of some recent tax law changes, including the new tax on net investment income.

Be proactive about your asset or investment sales as well as the tax implications of your capital gains.