When you sell a capital asset, like an investment or a piece of property, the sale can result in a capital gain or loss. The Internal Revenue Service (IRS) defines a capital asset as “almost anything you own for personal use or own as an investment.” Here are three facts you should keep in mind:
- A capital gain or loss is the difference between what you originally paid for the asset (your basis) and the amount you get when you sell an asset.
- The IRS may allow you to deduct capital losses on the sale of an investment or piece of property.
- If your total net capital loss is more than the limit you can deduct, you may be able to carry it over to next year’s tax return.
*This information is not intended to substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov7
Footnotes And Sources
- IRS.gov, January 26, 2023