What happens when I sell an asset or home?
When an asset or home is sold (including stock or other interest in a business) a taxable event has occured. This event is refered to as a capital gain. To calculate your taxable gain on the transaction we consider the following simple formula:
Original price paid for asset
(+) Any expenses related to the sale or upkeep of the asset
(-) Final Sales Price
(=) Taxable Gain
-If you are selling a stock or other asset through a broker or intermediary they will usually provide you the information needed on a 1099.
-If the transaction is between individuals, or you have expenses involved in the transaction, it is important you retain receipts and records.
-If you are selling your personal primary residence that you have lived in for any two of the previous five years (and your gain is under certain limits) you may be able to exclude the entire amount from taxable income. Ask us about this!