The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: Capital gains||Date: 4/10/1998 3:45 PM|
|Author: deepdude||Number: 3393 of 125194|
I am a novice investor with some capital gains in yr. '97. I wanted to know how this gain is calculated. I think it would be easier if I pose my question with an example. Assume all transactions took place in the same year.
- Bought 50 shares @ $1.00 per share in April
- Bought 100 shares @ 1.50 per share in June
- Sold 25 shares @ 2.00 per share in August
What is my capital gain ? Basically the question is that when a sell some shares in a year - how is it determined what price I bought them at - hence what is the actual gain ?
I am only trying to understand how the actual gain is calculated i.e. how much money do I pay capital gains tax on ? Tax rates and the changes are irrelevant to my question so please ignore the timeline and the change in tax rates. Thanks !
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