If you are an investor, you should become familiar with the tax implications of your capital gains or capital losses. According to the IRS, most items you own for investment purposes can be defined as a capital asset. These assets can include property such as your home, bonds, or stock in a company.http://www.irs.gov/taxtopics/tc409.html 

Any income you receive through your investments is taxed. Losses you suffer on your investments may be eligible for a tax deduction. The tax treatment for capital gains varies based on the investment category and the length of time you hold onto the assets.http://www.irs.gov/taxtopics/tc409.html  Learn how your investment activities can impact your tax obligation to become a more informed investor.

Capital gains occur when you sell an investment asset and earn money above the initial cost of the asset. If you held the asset for more than a year, it is considered a long-term capital gain. Short-term capital gains occur for assets held for less than a year.http://www.youtube.com/watch?v=y7LE-le1PiA  Capital losses occur when you sell an asset for less than the purchase price.http://www.irs.gov/taxtopics/tc409.html 

Capital gains tax brackets are primarily based on the length of time you held the asset. Short-term capital gains are taxed at your ordinary tax rate. Long-term investments receive a tax break. If you fall in the 10 or 15 percent tax brackets, your capital gains tax rate is likely 0 percent. If you are in a higher tax bracket, your gains will be taxed at a 15 percent rate.http://www.irs.gov/taxtopics/tc409.html  All capital gains information must be included on Schedule D and included on your 1040 or other income tax form.http://www.youtube.com/watch?v=y7LE-le1PiA 

You are allowed to deduct a maximum of $3,000 in capital losses per tax year. That amount is reduced by half you file your taxes as "married filing separately." If your total capital losses are greater than the allowed, you can carry over the loss to next year's filing.http://www.youtube.com/watch?v=y7LE-le1PiA 

Fill out Schedule D with a listing of all your capital losses under the short-term capital gains and losses or long-term capital gains and losses section based on the length of time you held the asset.http://www.irs.gov/pub/irs-pdf/f1040sd.pdf