Hi, I have some basic questions.
How are capital losses/gain treated relative initial capital you started with?
Say you had a realized capital loss in year 1. Here I guess no taxes are owed and you can actually use that loss to deduct.
In year 2, you made a profit but you just recouped your last year loss. Basically, you are break even. Do you still owe tax for the year 2 profit? Effectively putting you in net loss?
Similarly if you had profit in year 2 exceeding the break even point, are all your year 2 gains taxed? or just the amounts above the break even point are taxed?
Thank you in advance for your kind replies !
How are capital losses/gain treated relative initial capital you started with?
Say you had a realized capital loss in year 1. Here I guess no taxes are owed and you can actually use that loss to deduct.
In year 2, you made a profit but you just recouped your last year loss. Basically, you are break even. Do you still owe tax for the year 2 profit? Effectively putting you in net loss?
Similarly if you had profit in year 2 exceeding the break even point, are all your year 2 gains taxed? or just the amounts above the break even point are taxed?
Thank you in advance for your kind replies !