Capital Gains or Losses

When your total capital gains for the year outweigh your total capital losses, you will end up with a net capital gain for the year. Similarly, when your total capital losses for the year outweigh your total capital gains, you will end up with a net capital loss for the year.

Capital assets taxable in the US include homes, cars, property, collectibles and investments like stocks and bonds.

It varies from country to country.

Most stock dividends in the US qualify to be taxed as capital gains. The tax rate for dividend income depends on whether the dividends are ordinary or qualified. A qualified dividend is taxed at the capital gains tax rate. Ordinary dividends are taxed at standard federal income tax rates.

In Singapore, dividends paid by resident companies are not taxed. Foreign dividends received by individual residents in Singapore are also non-taxable. If an individual resident in Singapore receives foreign-sourced dividends through a partnership in Singapore, these dividends may be exempted from Singapore tax if certain conditions are met.

You can try to invest for the long term. Whenever possible, hold an asset for a year or longer so that you qualify for the long-term capital gains tax rate, since this is significantly lower than the short-term capital gains rate for most assets in the US.

You can also use a capital loss to offset gains. Selling poorly performing assets that no longer suit your investment objectives before the end of a financial year is one option. By selling a poorly performing asset and incurring a capital loss, you may use it to offset a realised capital gain from another asset in the same financial year. This allows you to manage your tax liabilities as well as free up your money for more suitable investment opportunities.