Cap gains question

[Jean-David Beyer]

Jon Lapham wrote:
> Steve Wallace wrote:
> 
>> On Thu, Jul 17, 2003 at 12:12:37PM -0300, Jon Lapham wrote:
>>
>>> So, short term cap gains are considered regular income in terms of
>>> taxes, while long term gets the cap gains tax break?
>>
>>
>>
>> Not exactly, two different concepts.  Although I believe in the US,
>> short term gains are *currently* subject to the same tax rate as
>> ordinary income, they are reported separately on Schedule D and are
>> subject to different tax rules and treatment.  Therefore short term
>> gains from sales need to be reported seperately from other sources of
>> income.
>>
> 
> huh, interesting.  So, really, for investments, we should have an income 
> account structure like this:
> 
> -Income
>    -Unrealized Gains

I doubt the above. From a tax point of view, unrealized gains are not 
gains at all and not taxable. There may be exception if you own a 
Chapter S corporation where you are taxed on profits of the corporation 
even if they are not distributed to you as a stockholder. Best advice 
here is to never own an Chapter S corporation.

>    -Realized Gains (short term)
>    -Realized Gains (long term)
> 
> Where the definitions of long and short term would vary from country to 
> country.
> 



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