Ask an Accountant

Ask an Accountant

What is a pass through entity?

Monday, June 22, 2015
A pass through entity is a business such as a partnership or S corporation that has to prepare and file a tax return but the entity itself does not incur a tax liability; rather, the earnings of the partnership of S corporation is “passed through” to the individual and taxed at that taxpayer’s income tax rate.

Am I limited to deducting only $3000 per year of my capital losses?

Thursday, June 18, 2015

 See More

What is the difference between a long-term capital gain (loss) and a short term capital gain (loss)?

Monday, June 15, 2015
Long term capital gains or losses occur when an asset is held for more than one year and then sold; whereas, short term capital gains and losses occur when an asset is held for one year or less.

Are Capital Gains taxed at a different rate that ordinary? income

Friday, June 12, 2015
In most instances, capital gains and qualified dividends are taxed at rates different from those for ordinary income.  The rates vary from 0% for those taxpayers in the 10- or 15-percent income tax brackets, 15% for those taxpayers in the 25-, 28-, 33-, or 35-percent income tax bracket and the capital gains tax rate is 20% for those taxpayers in the highest (39.6%) income tax bracket.

What is a capital gain?

Wednesday, June 10, 2015
A capital gain occurs when an asset held for investment purposes by an individual (as opposed to a business) is sold in excess of a taxpayer’s basis (cost) for that asset.  Such assets include, but are not limited to: stocks, bonds, real estate, and rental properties (residential and commercial).  For example:  A stock bought for $4.00/shares sells ten years later for $40/share with no load fees or commissions.  The taxpayer would have a capital gain of $36/share.  

What tax bracket am I (are we) in?

Wednesday, June 10, 2015
Your tax bracket depends on your taxable income.  For 2015, tax rates start at 10% for taxpayers with taxable income of $9,225 or lower and go up to 39.6% for taxpayers with taxable income in excess of $413,200.