For those who have succeeded in growing their capital, eventually the time comes to sell your investment and re-deploy the assets. What are the tax consequences of selling an investment?

The investor will compare the selling price of the investment to the cost or basis. The excess of the selling price over the cost or basis is a gain, while if the selling price does not exceed the cost or basis, then the transaction results in a loss. Cost is generally what you pay for the asset. If you receive the asset as a gift, then your cost or basis is the cost or basis to the person giving the gift. So if the asset has been held for a long time by the original purchaser, the result may be a large gain. It might make sense for the original purchaser to make a gift of highly appreciated property to a charity. In that case the purchaser gets a tax deduction for the fair market value of the gift, and does not have to pay the tax on the gain while held in the purchaser’s possession. If you receive the asset through inheritance, then the cost or basis to you is the value of the asset at the date of death of the decedent. There are complex rules associated with transfer of assets by gift before death, especially as they relate to inheritance taxes and also for elder care issues. Make sure you get competent advice before making such gifts.

Assets that are sold and are held for more than one year have ... _CBJ