Question

why you should know five things about capital gains tax? what is pro and con for each of them?

Answer 1

Capital gains tax is a levy assessed on the positive difference between the sale price of the asset and its original purchase price.

Capital gain is two type 1 short term and 2 is long term capital gain

5 Things to Know About Capital Gains Tax

-Capital gains can come in two forms: short-term or long-term gains

-Capital gains tax is the only voluntary tax - if you have capital gain then only pay capital gain tax

-Real estate may be exempt from capital gains tax-:

-Capital losses can offset capital gains. ...

-You can avoid all of the capital gains tax hassle with a retirement account.

Some advantages of the capital gains tax are that you can defer it until you sell your asset and that you may pay less tax is it's a long-term gain vs. a short-term gain. Downsides include profit reduction, a higher tax rate for short-term gains and double taxation