Selling stocks, funds, or other capital assets can affect your taxes. The holding period and adjusted cost basis are often just as important as the sale price.
← Back to Tax TopicsGenerally, a capital gain or loss is the difference between the amount realized on the sale of a capital asset and its adjusted tax basis. Basis is often related to cost, but gifts, inheritances, reinvestments, and adjustments may require special treatment.
For most capital assets, a holding period of one year or less produces short-term treatment; more than one year produces long-term treatment. Net short-term gains generally are taxed at ordinary income rates. Long-term gains may qualify for preferential rates depending on taxable income and the type of asset.
Capital losses can generally offset capital gains. If individual net capital losses exceed gains, a limited amount may offset other income and unused amounts may carry forward. Losses on personal-use property generally are not deductible.
Brokerage Forms 1099-B and 1099-DIV may report sales and distributions. Sales may be reported on Form 8949 and Schedule D, depending on the transaction and reporting exceptions. Verify basis and holding periods rather than assuming every broker-reported figure is complete.
Wash sales, inherited assets, home sales, cryptocurrency transactions, mutual-fund distributions, and sales of rental or business property can involve additional rules or different forms.
Save purchase confirmations, brokerage statements, reinvestment history, sale confirmations, and records supporting basis adjustments.
Educational overview of U.S. federal tax rules; not individualized tax or legal advice. Tax rules and filing requirements can change, and exceptions may apply. North Carolina and other state rules may differ. Last reviewed October 2026.
Let’s talk through the details before deciding what applies to you.
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