In general, capital assets encompass anything that is held and used for investment, pleasure, or personal use, such as stocks, bonds, residences, vehicles, jewels, and works of art. A “capital gain” is the consequence of any growth in the value of one of those assets, such as when the price of a stock you own rises.
When someone “realizes” a capital gain—that is, sells an item whose value has increased—in a jurisdiction where there is a capital gains tax, they must pay tax on the profit they make.
Capital gains taxes, commonly referred to as double taxation, occur when they are applied to earnings obtained from stock investments. This is due to the fact that corporate income tax is already applied to company earnings.
The tax laws are very complex. Our short blog articles cannot cover in full all the nuances of the rules. Your specific facts may hold various opportunities and possible risks that only trained, experienced, and highly qualified tax specialists can spot. We encourage you to find such help, rather than trying to figure it all out on your own. Consider giving this marketplace a try by posting your project and signing up here.
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