It’s tax time which means we need to deal with the Schedule D again this year. In case you are new to all this (or want a refresher), here are 14 facts you need to know about the schedule D.
- The 1040 Form Schedule D for the 2008 tax year can be found here (instructions here).
- If you sold a property or stock, you must file a Schedule D
- If you lost money, you can use this form to offset your gains
- On the form, you need to know when you bought and sold the asset, what it is and the cost of buying and the price you sold it at.
- Long term gains (assets held one year or more) are taxed at 15%
- If your federal tax bracket is 10 or 15%, long term gain tax rate is 5%
- Short term gains (assets held less than one year) are taxed at your regular income tax rate, which could be as high as 35%!
- If you have short term losses, you can start deducting all the short term gains. Once those cancel out, you can start deducting the long term gains if you have any.
- Once all the gains are canceled out, a total of $3,000 per year can be used to deduct other forms of income
- Losses over $3,000 can be carried over to later years until death
- If your only investment sell is a house and the capital gain is less than $250,000 (less than $500,000 for a married couple filing taxes jointly), you don’t need to file a Schedule D
- Note the wash rule (buying a similar asset within 30 days of selling it) as it keep you from taking that lost this year.
- Companies like Gainskeeper can help you automatically create a Schedule D from your brokerage account.
- Then it can even be imported into tax software like TaxAct for full automation.
What else can you think of and have you started yet? Let us know!
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Fact 1 claims to link to the 2008 Schedule D. It actually links to the 2009 Schedule D. I used the wrong-year form once before and it cost me months of time with the IRS. I had even crossed out the year and written in the correct one, per their instructions.
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