? asked in Business & FinanceTaxesCanada · 3 months ago

Capital gains and income?

This may be a stupid question but I have to make sure.  If I sell a stock and it increases my income is is my income increased by amount of my capital gain or the whole amount of the sale. 

Eg. i have income of 70,000 and sell 30,000 of stock. My profit off the sale is 5,000

Weill I be taxed on income of 100,000 or 75,000?

6 Answers

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  • Anonymous
    3 months ago
    Favorite Answer

    You will be taxed on 75k.    If you owned the stock more than a year, the 5k capital gain will qualify for the lower capital gains tax rate.    You would file a Schedule D and use the worksheet in the 1040 instructions to figure your tax.   If you go straight to the tax table, you'll overpay.

  • John Q
    Lv 4
    1 day ago

    Since you asked in the Canadian section, I will give you the Canadian answer. Profits from selling securities are normally taxed as capital gains. In Canada, you only have to pay tax on 50% of the capital gain, not the full amount. Thus your taxable income for that year will be $72,500. 

  • Judy
    Lv 7
    3 months ago

    at most,  75000, maybe less.

  • 3 months ago

    Your income increases by the amount of the profit.

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  • Anonymous
    3 months ago

    You're right. It was a stupid question.

  • 3 months ago

    If you fill out the paperwork correctly, then you are taxed on only $75,000.  If you don't report the sale, then you are taxed on the full $100,000.  If you report the sale correctly, then your income is increased by only the amount of gain.  If you don't report the sale, then your income is increased by the whole amount of the sale.

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