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To: knarf

A Capital Gain is a profit on a Capital Asset. Example: Your house, you paid 100K and sold it for 120K, the 20K is a capital gain.

So if you just made a profit off of a product from your Capital Asset it is just income and you only pay taxes on it if you made enough to have to pay taxes.


9 posted on 02/13/2014 4:42:54 AM PST by tiki
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To: tiki

Royalty income from oil/gas production is considered to be ordinary income and subject to the taxes just like business profit, W-2 income, etc. Income made from the difference between purchase and sale of a capital investment is a gain on capital investment, thus a “ capital gain” and subject to the tax laws that are applicable.


11 posted on 02/13/2014 4:56:51 AM PST by rstrahan
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