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Term Definition Capital Gains - the profits from an investment that have been held long term.
Application in Divorce Long-term capital gains are normally taxed at a lower rate than short-term gains or ordinary income.

Under certain circumstances, a person claim exclusion of $500,000. Under certain circumstances ex-spouses may qualify for this exclusion.

Capital gains are not recognized when transferring ownership of the party sells the home in the future.

When dividing or selling equities upon divorce, it is very important to recognize any short-term or long term gains that will be paid upon the sale of the spouse will have a greater amount of capital gain taxes to be paid when the shares are sold. Also the length of time of ownership of shares of stock will determine whether or not it will be taxed as a long-term or short-term gain.