Capital Gains Tax 19

There are so many things to​ keep track of​ when it​ comes to​ personal finances .​
Through the​ years I​ have done our personal taxes because we have a​ rather simple income base,​ but it​ is​ difficult to​ keep up with all of​ the​ different tax laws .​
Having the​ tax programs on​ the​ computer is​ extremely helpful .​
If it​ had not been for the​ computer program that I​ installed this year we most likely would have had a​ penalty .​
My brother and sister in​ law had a​ penalty and they went through a​ tax preparation service.
My husband’s father retired several years ago and made some great investments .​
He did so well that he transferred some of​ his holdings into each of​ his children’s name .​
This was paid out into a​ check for each of​ them .​
Because this payment was paid directly from the​ company the​ income was subject to​ capital gains tax .​
We each received a​ statement for tax purposes .​
My brother and sister-in-law misplaced their statement and told their tax preparer that they were gifted money by his father .​
The tax preparer told them that this did not have to​ be claimed because the​ amount was not large enough .​
a​ few months later they were sent a​ letter from the​ internal revenue service because they did not report the​ capitol gains tax .​
They contacted the​ person that had prepared their taxes .​
He told them that he did not realize that the​ money was from an​ investment and that they definitely had to​ pay capital gains tax on​ the​ amount .​
Because they did not produce the​ form that was sent by the​ investment company his firm would not cover the​ penalty .​
My brother in​ law was very upset by this .​
He felt that he had told him about the​ money and was told he did not have to​ claim it,​ so it​ was the​ accountant’s fault that they had a​ penalty.
This was a​ good lesson for all of​ us to​ learn as​ we prepare our taxes .​
We are getting to​ the​ age where gifts from parents and estates are becoming part of​ our income .​
It is​ important to​ know the​ difference between a​ monetary gift,​ which is​ not taxable as​ long as​ it​ is​ under a​ certain amount,​ and money that comes from the​ sale of​ an​ investment .​
All capital gains tax needs to​ be paid .​
Capital gain is​ money that is​ made off of​ an​ investment .​
If my husband’s father would have had all the​ money from the​ investment paid to​ him,​ and then cashed the​ check and given it​ to​ us it​ would have been a​ cash gift and would not been taxable .​
He would have had to​ pay capital gains tax on​ the​ entire amount .​
By splitting the​ funds in​ everyone’s name he also spread the​ tax responsibility.

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