How do I figure gains and losses on Schedule D?

Considerations

This is a frequently asked question during tax time. The basic principles for figuring gains and losses on the Schedule D include the following:

• To calculate gains or losses, subtract the cost to purchase a security from the proceeds of selling it.

• Gains from investments held longer than one year are taxed at the more favorable capital gains rate (no higher than 15%). Investments held less than a year are treated as income and taxed at the personal income tax rate (as high as 35%).

• If you have a net loss position for the year, the IRS will allow you to write-off a loss of up to $3,000 against your income. All other losses must be carried-forward to future years.