The tax law requires that capital gains and losses be separated from other types of gains and losses. Among the reasons for this treatment are: a."Long-term capital gains may be taxed at a lower rate than ordinary gains" and "Net capital loss is deductible only up to $3,000 per year for individual taxpayers". b.Short-term capital losses are not deductible. c.Net capital loss is deductible only up to $3,000 per year for individual taxpayers. d.Long-term capital gains may be taxed at a lower rate than ordinary gains.

Q: TRUE OR FALSE? 1st statement: Interest income must be included in the computation of gross income if…

A: Gross Income: The entire earnings a person obtains before taxes and other deductions are referred to…

Q: Deferred tax assets and deferred tax liabilities represent the tax effect of the temporary…

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A: The question is related to true or False.

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A: Solution: following cases would result in a Deferred Tax Liability as they will create future…

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Q: Which of the following is the least likely reason why the 6% capital gains tax is a final tax?

A: First let us understand what is a final tax. Final taxation system focus on the transaction, and…

Q: Which of the following is the least likely reason why the 6% capital gains tax is a final tax? " To…

A: capital gains are the type of gain which are of a capital nature. In other words, it is the gain…

Q: Which of the following is false? a.    Under GAAP, deferred taxes are reported based on the…

A:

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Q: The benefit of future deductible amounts can be achieved only if future income is sufficient to take…

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Q: current and future tax consequences of transactions accounted for

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A: Answer: Balance sheet consists of assets and liabilities as part of financials.

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Q: TRUE OR FALSE? If the carrying amount of a liability is higher than the tax base, the difference is…

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A:

Q: The deferred tax expense is the Select one: a. decrease in balance of deferred tax asset minus…

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Q: Which of the following is false? (a) Under GAAP, deferred taxes are reported based on the…

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Q: deferred tax liability uses    a. Expected future tax law, regardless of whether those expected laws…

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Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.