How is the income from stock or mutual funds taxed?
Profit generated from the sale of non-personal items such as stock, bonds, mutual funds, land, or collectibles are known as capital gains income. Such income may be taxed at a different, and usually more favorable, rate than ordinary income. To determine your income tax liability for such transactions, the tax center must know both the date and amount for which the item was purchased (cost basis) and the date and amount for which it was sold. If you do not know your cost basis, contact your broker/investment company. The Tax Center cannot determine your cost basis for you. If you have capital gains income, you must provide this information for each transaction or the Tax Center will not be able to compute your taxes accurately. Additionally, if the sale of your capital items resulted in a loss, you may be eligible for a deduction up to $3,000 ($1,500 if Married Filing Separate), which would reduce your gross income dollar-for-dollar.
