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jgordosea, Enrolled Agent
Category: Tax
Satisfied Customers: 3159
Experience:  I've prepared all types of taxes since 1987.
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Are stock sales proceeds taxed as regular income I purchased

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Are stock sales proceeds taxed as regular income? I purchased Allstate stock over 5 years, and "cashed in" the stock last year.



Gain on the sale of stock that is not held in a retirement plan or Individual Retirement Account is capital gain reported on Form 1040 Schedule D and then transferred to line 13 of Form 1040, U.S. Individual Income Tax Return.


Capital gains and losses are classified as long-term or short term. If you hold the asset for more than one year, your capital gain or loss is long-term. Short term capital gain is taxed at the same rate as ordinary income; but long-term gains are taxed at 15% (and in some cases less) regardless of your tax rate on ordinary income. See Reporting Capital Gains for more details and links to publications.


I hope this helps for understanding reporting and rates on capital gains.


Best wishes.




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