It’s Tax Time!

Expert Strategies to get you through the Tax season like a Pro…

It’s nice to own stocks, bonds, and other investments. Nice, that is, until it’s time to fill out your federal income tax return. At that point, you may be left scratching your head.

How do you report your investments and how are they taxed?

Do you know the difference between capital gains and ordinary income?

Investments often produce ordinary income. Examples of ordinary income include interest and rental income. Many investments–including savings accounts, certificates of deposit, money market accounts, annuities, bonds, and some preferred stock — can generate ordinary income. Ordinary income is taxed at ordinary rates (as opposed to capital gains rates).

If you sell stocks, bonds, or other capital assets, you’ll end up with a capital gain or loss. Special capital gains tax rates may apply, which may be lower than ordinary income tax rates.  Basically, capital gain (or loss) equals the amount that you realize on the sale of your asset (i.e., the amount of cash and/or the value of any property you receive) less your adjusted basis in the asset.

Many best practices in wealth management include “harvesting” capital losses to reduce your tax liability. This means intentionally selling some investments at a loss while maintaining your investment within the industry that you are harvesting from. The sales of some assets are more difficult to calculate and report than others, so you may need help to properly calculate your capital gain or loss…



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