# Anyone with experience filing Schedule D? Or just general investment knowledge



## USinCanada (Mar 18, 2012)

US citizen living in Canada, need to file an old return. 

I had roughly 35k in mutual funds with an investment company. The funds were not doing well so I decided to switch to a better performing fund. In that process I obviously had to sell the original funds that I had to purchase new ones. They were all funds sold by my current investor. Are these transactions like kind exchanges? 

FWIW, the original funds were purchased when I was under age by my parents (family member passed and he left us a small amount of money). I had the funds for about 15 years or so before selling them (exchanging them for better performing funds IMO). I'm not sure if any of that info is relevant, I am pretty ignorant about this stuff and I'm not sure if long term vs. short term gains come into play here. 

Also, I took approximately 15k from the 35k for bills, so, only 20k was reinvested. I'm not sure what my obligations are here. The 35 total, or just the 15k. I'm also unsure about the like kind exchange and if that will have any bearing on what I will owe when filing.

Money is tight right now and I can't really afford to pay for professional advice. I'm kind of lost here and any help would be appreciated. Thanks in advance.


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## Bevdeforges (Nov 16, 2007)

Are these mutual funds in Canada or in the US? If they are US based funds, then you should have received a form 1099 for any trades you made involving the funds and the forms will indicate what needs to be reported. 

If they are Canadian funds, you'll have to work out the numbers for yourself.

Here is the IRS page on capital gains and losses: Tax Topics - Topic 409 Capital Gains and Losses There are links to a number of publications that give more detail on how these work and how to report gains and losses on the various forms.
Cheers,
Bev


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## USinCanada (Mar 18, 2012)

BBCWatcher said:


> They are long term capital gains because you held the funds for more than one year.
> 
> They are probably not like exchanges unless the funds are very similar. For example, if you switched from Vanguard's S&P 500 stock index fund to Fidelity's S&P 500 stock index fund, that would probably be a like exchange. If there are material differences between the funds, probably not.
> 
> What you used the proceeds for is only relevant if the investment was held in a tax advantaged account of some kind such as an IRA or 529 plan. Assuming that's not the case, you would simply take the net proceeds ($35K) and subtract from that the cost basis (what your parents paid originally when they gave the funds to you -- and I'm assuming they each gave an amount below the gift limit, which seems correct for that amount). So if they paid $20K ($10K per parent), then the net gain is $15K, and that would be the taxable capital gain.


Honestly I'm a complete idiot when it comes to investments. I recall my investor mentioning something about not being penalized because I was switching to a similar fund. I guess I should just call him and ask. 

I have absolutely no idea how my parents set up the funds, I will ask them but I doubt they will even remember. I know the amount was 15k, whether they did half each I'm not sure. I'm guessing the way you worded that it would have made sense for them to do that for tax purposes? I do remember both my parents names being on the account before I turned the age to take over myself...




Bevdeforges said:


> Are these mutual funds in Canada or in the US? If they are US based funds, then you should have received a form 1099 for any trades you made involving the funds and the forms will indicate what needs to be reported.
> 
> If they are Canadian funds, you'll have to work out the numbers for yourself.
> 
> ...


They are US funds. Thanks for the link, I will read up on that.


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## USinCanada (Mar 18, 2012)

I read an intersting article about long term capital gains and how those gains will be taxed. 

Capital Gains: At What Rate Will Your Sale Be Taxed? - SmartMoney.com

According to the article, if you are in the 10 or 15% tax bracket you may owe nothing on your long term capital gains. For me, I earned just under 25k at my part time Canadian job. That would be in the 15% tax bracket for the U.S. If my Foreign Earned Income Exclusion still applies, which it does as far as I know, I am back to an AGI of 0 to this point.

Initial investment was an inherited 15k. Final sale was 35k. Long term capital gain of 20k is now my taxable income. 20k is in the 15% bracket as well, so, is it possible I owe nothing on these gains? Or am I way off base here. I want to be precise when filling out my Schedule D, so, I have specific numbers if that would be beneficial to anyone potentially responding. 

Unfortunately I do not have the complete 1099-B from that year. I do have a consolidated 1099 form that has most of the pertinent information that I think I will need to fill out a Schedule D, but, that is something I am going to have to tackle on the weekend when I have more free time.


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## USinCanada (Mar 18, 2012)

BBCWatcher said:


> Yes, the tax rate will depend on your tax bracket -- you are correct. I think your tax bracket for these purposes will depend on your worldwide income (correct again) but before the foreign earned income and foreign housing exclusions.
> 
> Yes, if your worldwide income put you in a lower tax bracket then your capital gains tax may be zero -- that's possible. If so, and if you didn't have a like exchange, congratulations, you picked a very good year to switch your investments.


Well hopefully it works out like that, but, I want to be sure when I fill the forms out. My tax bracket is 15% before any foreign exclusion. This is the only year I could potentially owe and I don't want to screw it up.  Is this something that's discussed in the Schedule D instructions? I won't be able to tackle that thing until the weekend. 

Is this something I could call the IRS and ask or would that be stupid on my part? 

BTW, I appreciate your help. Thanks.


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