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Articles From Lumsden McCormick

A Taxing Story: Capital Gains and Losses

Capital gains result when an individual sells an investment for an amount greater than their purchase price. Capital gains are categorized as short-term gains (a gain realized on an asset held one year or less) or long-term gains (a gain realized on an asset held longer than one year).

Keep in mind that the information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation.

Long-Term vs. Short-Term Gains

Short-term capital gains are taxed at ordinary income tax rates. Long-term capital gains are taxed according to different ranges (shown below).1

Long Term Capital Gains Tax Brackets (for 2024)

Tax
Bracket/Rate
Single Married Filing
Jointly
Head of
Household
0% $0 - $47,025 $0 - $94,050 $0 - $63,000
15% $47,026 - $518,900 $94,051-$583,750 $63,001 - $551,350
20% $518,900+ $583,750+ $551,350+

 

It should also be noted that taxpayers whose adjusted gross income is in excess of $200,000 (single filers or heads of household) or $250,000 (joint filers) may be subject to an additional 3.8% tax as a net investment income tax.2

Also, keep in mind that the long-term capital gains rate for collectibles and precious metals remains at a maximum of 28%.3

Rules for Capital Losses

Capital losses may be used to offset capital gains. If the losses exceed the gains, up to $3,000 of those losses may be used to offset the taxes on other kinds of income. Should you have more than $3,000 in such capital losses, you may be able to carry the losses forward. You can continue to carry forward these losses until such time that future realized gains exhaust them. Under current law, the ability to carry these losses forward is lost only on death.4

Finally, for some assets, the calculation of a capital gain or loss may not be as simple and straightforward as it sounds. As with any matter dealing with taxes, individuals are encouraged to seek the counsel of a tax professional before making any tax-related decisions.

Austin Robare, CPFA, Financial Advisor, may be reached at 716-856-3300 or arobare@lumsdencpa.com.

www.fslumsden.com


The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Citations

1. IRS.gov, 2024
2. IRS.gov, 2024
3. Investopedia.com, November 28, 2023
4. IRS.gov, 2024

A Taxing Story: Capital Gains and Losses

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Austin joined Lumsden & McCormick Financial Services in March 2022 as a financial advisor. He is currently licensed with his Series 7, 65 & 63, SIE, and Life & Health. Austin assists the Financial Services leadership team to deliver custom, holistic plans that fit an individual’s entire financial situation understanding the importance of cash flow, the role of taxes, wealth preservation, and legacy building. Additionally, Austin works with businesses and their owners to set up and manage their qualified retirement plans. 

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