Q:

How can I increase my capital gains?

A:

Quick Answer

A person can increase capital gains by selling particular assets at an amount greater than the purchase price, notes the Internal Revenue Service. These assets must be held for at least one year prior to being sold on the open market.

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How can I increase my capital gains?
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Full Answer

Capital assets are the only assets eligible to be taxed at the capital-gains rate. By definition, these assets are items owned that are used for either personal or investment purposes, notes the Internal Revenue Service. Examples include a home, household furnishings and investment securities, as stated by Chron Small Business. Assets held for more than one year prior to disposal are taxed at a rate lower than the normal ordinary income rate.

To increase capital gains, a person or business needs to sell capital assets in the period that the gains are desired. If an owned item appreciates in value but is not sold, the item is not eligible to be taxed at the capital-gains rate, notes the Internal Revenue Service. This gain is known as the realized gain, and the gain that is actually taxed when the item is sold is referred to as the recognized gain. A person looking to increase capital gains should treat each asset sale individually. For instance, the sale of a business requires that each specific business asset be considered separately for capital-gains calculation purposes.

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