Thursday, April 22, 2010

10 Facts about Captial Gains and Losses

10 Facts about Capital Gains and Losses

Have you heard of capital gains and losses? If not, you may want to read up on them because they might have an impact on your tax return. The IRS wants you to know these ten facts about gains and losses and how they could affect your tax situation.

1. Almost everything you own and use for personal purposes, pleasure or investment is a capital asset.

2. When you sell a capital asset, the difference between the amount you sell it for and your basis – which is

usually what you paid for it – is a capital gain or a capital loss.

3. You must report all capital gains.

4. You may deduct capital losses only on investment property, not on property held for personal use.

5. Capital gains and losses are classified as long-term or short-term, depending on how long you hold the

property before you sell it. If you hold it more than one year, your capital gain or loss is long-term. If you

hold it one year or less, your capital gain or loss is short-term.

6. If you have long-term gains in excess of your long-term losses, you have a net capital gain to the extent your

net long-term capital gain is more than your net short-term capital loss, if any.

7. The tax rates that apply to net capital gain are generally lower than the tax rates that apply to other income.

For 2009, the maximum capital gains rate for most people is15%. For lower-income individuals, the rate

may be 0% on some or all of the net capital gain. Special types of net capital gain can be taxed at 25% or


8. If your capital losses exceed your capital gains, the excess can be deducted on your tax return and used to

reduce other income, such as wages, up to an annual limit of $3,000, or $1,500 if you are married filing


9. If your total net capital loss is more than the yearly limit on capital loss deductions, you can carry over the

unused part to the next year and treat it as if you incurred it in that next year.

10. Capital gains and losses are reported on Schedule D, Capital Gains and Losses, and then transferred to line

13of Form 1040.

For more information about reporting capital gains and losses, please call me to see if you are eligible.

As always, please don't hesitate to call us if we can assist you in any way.



Michael R. Favazza, CPA

Favazza & Associates, LLC

Certified Public Accountants and Business Consultants

1811 Sherman Dr. Suite 9

St. Charles, MO 63303

Phone: (636) 916-1010

Monday, April 12, 2010

Pending home sales are up significantly, 21.8 percent in the Midwest

With mortgage rates potentially increasing, now is the right time to buy a home

Some goods news for the housing market–pending home sales rose in February by 8.2%, possibly showing another surge of sales as the deadline draws near for many government assistance programs, including the $8,000 tax credit for first-time homebuyers.

Pending home sales rose in February, potentially signaling a second surge of home sales in response to the home buyer tax credit, according to the National Association of Realtors®.
The Pending Home Sales Index (PHSI), a forward-looking indicator based on contracts signed in February, rose 8.2 percent to 97.6 from a downwardly revised 90.2 in January, and remains 17.3 percent above February 2009 when it was 83.2. The data reflects contracts and not closings, which usually occur with a lag time of one or two months. In the Midwest the index jumped 21.8 percent to 97.9 and is 18.7 percent above a year ago.

Lawrence Yun, NAR chief economist, said the improvement is another hopeful sign. “The rise in buyer contract activity may signal the early stages of a second surge of home sales this spring. Also, we’re hearing about a rise of activity in recent weeks with ongoing reports of multiple offers in more markets, so the March data could demonstrate additional improvement from buyers responding to the tax credit,” Yun said.

Here’s another interesting take on the increase in home sales. According to Jean Folger of the Wall Street Journal, the Mortgage Bankers Association (MBA) expects the rate on a 30-year fixed rate mortgage to increase to 6.1% by the end of the year. For the week ending March 19, the interest rate was 4.91%.

As an example, the monthly payment on a $180,000 30-year mortgage (excluding taxes and private mortgage insurance) at 6.1% will be a monthly payment of $1,091, with total interest paid equal to $212, 685.

The same loan at 4.91% rate will be a $956 monthly payment (saving $135 per month) with total interest equal to $164,305, which is a substantial savings of $48,380 over the course of the loan. Even the most insignificant mortgage rate changes can have a major impact on the total cost of a home.

This is just another reason to purchase a home this spring.

Written by Myra Vandersall

Tuesday, April 6, 2010

Calendar of Events April 2010

Friday, April 9-Sunday, April 11
Used Book Sale
St. Charles Public Library
Friday, 2:30-7:30 p.m., Saturday, 9 a.m.-1 p.m., Sunday, noon- 2p.m.
Hardcover and paperback books available at bargain prices. Saturday is half price day and Sunday is bag day. Sponsored by the Friends of the St. Charles Public Library. For more information call 630-584-0076 or go to the Library’s website.

Friday, April 9-Sunday, April 11
Tartan Days
Frontier Park
Ceud Mile Failte! Get your caber on at the St. Charles Tartan Day Festivities. Learn about Scot-American culture, visit skilled artisans, musicians and animal experts. Read sheep. Enjoy the Gateway Cabermen competition and listen to Highland Reign, St. Louis Caledonian Pipe Band and the John Ford Highland Pipe Band. Miss Tartan Day will be crowned on Friday, a parade and music on Saturday and Kirkin of the Tartan ceremony on Sunday morning. The Missouri Tartan Day Festivities is pleased to once again host the Gateway Cabermen, St. Louis' only Scottish Heavy Athletics association. Each year, the Gateway Cabermen offer a series of clinics and demonstrations for both men and women.

Tuesday, April 13
Healing at Your Fingertips
10-11:30 a.m.
Java G’s Coffeehouse Café, Old Highway 94 South
Learn how acupressure works and help yourself deal with pain. Try pressure points in class and experience immediate relief.
Fee $9

Friday, April 23-Sunday, April 25
6th annual Builders St. Charles Home Show
St. Charles Convention Center
Friday, April 23, 11 a.m. to 9 p.m.; Saturday, April 24, 11 a.m. to 9 p.m.; Sunday, April 25, 11 a.m. to 5 p.m.
The show includes speakers, seminars, children's entertainment, a sausage and wine tasting festival and about 350 booths from 200 companies featuring windows, doors, kitchen and bath products, pools and spas, home accessories and more. A Habitat for Humanity Restore offers new and used home-improvement merchandise at discount prices.

Sunday, April 25
St. Louis Earth Day Festival
1 a.m-6 p.m.
Forest Park, St. Louis
Earth Day 2010 features educational exhibits and hands-on activities, music and entertainment, an Earth Day café, locally produced foods and beverages and an all-species parade. For info, go to the event website.

Friday, April 23 – Sunday, April 25

Art Walk
Historic St. Charles Downtown District
Friday: 5 pm - 8 pm
Saturday: 10 am - 8 pm
Sunday: 12 am - 5 pm
The annual Spring Artwalk features artists exhibiting along Main Street and at the Foundry Art Centre with music and flowers enhancing the ambiance. Mediums represented include photography, watercolor, acrylic, and oil paintings, earthen ornaments, blown glass, steel sculpture, drawings and pastels, clay and raku pottery, and more. For more information call 636-949-3231.

Written by Myra Vandersall