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Are stock sales proceeds taxed as regular income I purchased

Are stock sales proceeds taxed...
Are stock sales proceeds taxed as regular income? I purchased Allstate stock over 5 years, and "cashed in" the stock last year.
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10/18/2008
jgordosea
jgordosea, Enrolled Agent
Category: Tax
Satisfied Customers: 3,161
Experience: I've prepared all types of taxes since 1987.
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Greetings,

 

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.

 

 

 

jgordosea
jgordosea, Enrolled Agent
Category: Tax
Satisfied Customers: 3,161
Experience: I've prepared all types of taxes since 1987.
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