The posts on this blog have emphasized that tax planning is important. Unless you have meagre earnings, you should make every effort to plan ahead before you begin preparing your tax returns. You can find many <a href="http://www.taxhelpvault.com/recommends/page64.html">tax planning 2008 09 </a>guides online, or you can ask for tax preparer to suggest a good one. However, most of them are free and you may even pick up <a href="http://www.taxhelpvault.com/recommends/page64.html">tax planning 2007 </a>guides if you are behind on filing your returns. Nevertheless, tax planning should be done religiously long before you begin completing your returns.

Read the article below to understand some of the ramifications of selling property.

<h4>Capital Gains Tax Explained</h4>
<p>Capital Gains tax is a federal tax penalty that is imposed on capital accumulation, investment and productivity. Some  of the income that is subject to capital gains tax includes  the sale of an investment,  a home, a family business, a  farm or ranch or even a work of art. The capital gains tax  is applied on the difference between the price paid for an  item and the money received from selling it, or the capital  gain.  <p>The most common form of capital gain for people is the  sale of their corporate stock. The capital gains tax rate  for individuals is currently at one of its highest rates  ever and is at 28% while the corporate rate is at its  greatest level in history, namely 35%.</p>  <p>There is an  inequality with capital gains tax in the fact that people  must pay taxes on all of their gains but are only able to  deduct a portion of their losses. This particularly applies  to investments that fluctuate between gains and losses over  time.In many states taxpayers are liable, not only for the  federal capital gains tax but also the state’s own form of  capital gains tax. This can actually take the combined rate  to almost 40%. California, Montana and Rhode Island are  amongst the highest in the country.</p> <p>For the government, the capital gains tax payment represent  6% of personal and corporate income tax receipts and 3% of  total federal revenues. There is a lot of controversy  surrounding the capital gains tax that individuals and  corporations have to pay but it actually brings in much less  revenue for the federal government than most people would  think. In fact, the total collections during the 1990s were  between $25 billion and $30 billion a year.</p>  <p>In the USA,  capital gains are not indexed for inflation which means that  the seller pays capital gains tax on the real gain and also  on the gain attributable to inflation. This is one reason  that the capital gains tax is lower than regular income tax  rates. In other countries, such as the United Kingdom, the  capital gains tax rate is much higher (over 40%) but there  it is actually indexed to inflation.</p> <p>The difference between  capital gains tax and all other forms of federal tax is that  it is basically a voluntary tax. People can avoid paying any  of the tax by simply not selling their assets. This is  becoming increasingly common, especially with the  uncertainty of the stock market, and the government  estimates that there is $7.5 trillion of unrealized capital  gains which would all be subject to capital gains tax if it  was sold.</p> <p>More Information: <a href="http://www.alltaxreturns.info">Tax Returns</a></p>

You do not pay capital gains tax if you keep your property in your name, that is, sell it to another person. 
