New rules shift responsibility for tracking capital gains

Q: What’s the easiest way to calculate capital gains and losses on stocks I sell?

A: Calculating capital gains by hand belongs on a long list of things that used to be important in people’s financial lives that increasingly aren’t anymore.

Due to new rules that kicked in over the past two years, it’s now the responsibility of your brokerage firm to track your capital gains and losses on stocks bought from 2011 on. It’s the responsibility of brokerages to track how much you paid for stocks, including the commission. At year’s end, the brokerages examine which stocks you sold, and calculate capital gains and losses for you.

Ultimately, at the end of the year, you’ll get a report from your brokerage firm. This report tells you how much you made or lost from stocks that were sold during the year. In most cases, you can simply enter the information from the capital gains form on the tax return.

There are some cases, though, where there might be complications. If you have taxable brokerage accounts at several firms, you might have some issues from overlapping transactions.

And also, calculating capital gains or losses on stocks bought before 2011 is your responsibility.

15%

Maximum long-term capital gains tax through 2012.

$3,000

Annual offset to taxable income allowed from capital losses.