Federal tax
Capital gains
A capital gain is the profit from selling a capital asset for more than its adjusted basis; holding it over one year usually makes the gain long term.
When you sell a capital asset, the difference between your adjusted basis and the amount you realized is a capital gain or loss. You have a gain if you sell for more than your adjusted cost basis.
The IRS sorts gains into long term and short term. If you held the asset more than one year, the gain is generally long term. If you held it one year or less, it is short term. The two groups are taxed under different rules. Gains from selling a business or rental property can be large, so plan before the sale. A sale of equipment can also create a gain after depreciation. The tax planning page covers sale planning.
Related terms
Sources
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Call the Southlake office and say what you need: a return, an IRS letter, your books or a new business. Have the notice or last year's return nearby if you have one.