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Reporting Capital Gains

Reporting Capital Gains

When you sell a capital asset for a profit, you will need to report those capital gains on your taxes. This can include real property, investments, and more. There will be a different tax rate depending on whether the capital gain was short-term (you owned the asset less than one year) or long-term, and it is important to report your gains in a proper manner to avoid any unnecessary losses or penalties. You should not hesitate to seek help from an experienced tax lawyer in San Francisco.

There are different forms you might receive for tax purposes, depending on the type of capital asset you earned income from. These can include:

  • Form 1099-B, which notes gains from investments
  • Form 1099-S, which notes gains from selling real property
  • Schedule K-1, which notes gains from an S corporation, partnership, or trust

There might be other forms you receive. The important thing is to know the initial cost of the asset and the price for which you sold the asset.

Once you gather the proper forms, you will need to fill out additional forms to attach to your Form 1040. This can include Form 8949, Sales and Other Dispositions of Capital Assets, on which you list your capital gains and losses for the relevant tax year. If you are married, you can fill out separate 8949’s or combine your gains and losses onto one form. You then will need to complete Schedule D, which calculates your tax based on the information on Form 8949. There also might be additional forms needed depending on the type of capital assets in question.

Contact a Tax Lawyer in San Francisco

You do not want to risk errors on your returns when it comes to reporting capital gains and losses. At SF Tax Counsel, we can help with your returns, as well as with errors on prior returns. Call 415.318.3990 or contact us online for help from a San Francisco tax attorney.