If you held the security for more than a year, it is long-term. Less than a year is short-term. The calculation for a capital gain or loss is straightforward: it starts with the selling price of your capital asset minus its cost basis (what you originally paid for it). TurboTax does this automatically. All you have to do is enter the form 1099-B.
How is a capital gain or loss calculated?
Where do I enter or import a 1099-B?
Your total capital gains for the year minus your total capital losses results in either a net capital gain or a net capital loss.
- Short-term capital gains (gains on assets held for one year or less) are taxed as ordinary income.
- Long-term capital gains (gains on assets held more than one year) are taxed at a more favorable rate than ordinary income.
Net losses are deductible, but only up to a maximum of $3,000 ($1,500 if Married Filing Separately). Any capital losses you couldn't deduct this year can be carried forward and deducted on future tax returns. This is called a capital loss carryover.
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