capital gains tax vs "taxable income"

Discussion in 'Taxes and Accounting' started by lundy, Dec 16, 2002.

  1. lundy

    lundy

    I don't know jack about taxes, except that I don't have any "taxable income" that I know of. My question is:

    Does capital gains tax fall under "taxable income"(income tax)? or is it a completely different type of tax.
     
  2. Capital gains are reported on schedule D of form 1040. Capital gains are income and taxed as such.
     
  3. jaredand

    jaredand

    i report everything on a sched c and i'm told its all ordinary income which would be the same for sched d's. not sure why you would ask if its taxable income...
     
  4. lundy

    lundy

    i asked cause I just finished reading www.taxableincome.net and wondered if what I just learned about the income tax laws applied to trading income as well.
     
  5. They're both taxable, it's the treatment for other tax items that's different. The difference between taxable and Capital Gains income is you don't have to pay self employment tax on Capital Gains. Also if you have long term Cap gains, you only pay 20% tax rather then the highest bracket % you fall into for short term cap gains. Also, you can only offset 3K of cap losses against taxable income. Where you can offset all your cap losses to the extent of cap gains plus 3K.