Definition of Net Capital Gain
The IRS's official definition of "net capital gain" can be extremely important for some taxpayers.
For purposes of the maximum capital gains rates, the term “adjusted net capital gain” means the sum of:
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The excess of net long-term capital gains over net short-term losses, subject to certain netting rules, but without considering the otherwise applicable increase for qualified dividend income, reduced (but not below zero) by the sum of:
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Unrecaptured Section 1250 gain, and
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“28% rate gain”, plus
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Qualified dividend income.