These gains don't cause pain. A capital gain is the amount of money you pocket by selling one of your investments for more than you paid for it. Technically, capital gains only count for what's called a capital asset, but that's really just anything you own for investment purposes. Stocks and bonds obviously qualify, but your house and household furnishings can also count.

For tax purposes, capital gains are classified as either long-term (held for more than one year) or short-term (held for less than one year) and there are different tax implications for how long you hold onto a capital asset. For most long-term capital gains, you're taxed no more than 15% of the value of the asset. Short-term gains get taxed as regular income, so you pay the rate for the tax bracket you're in.

Capital gains can also be realized or unrealized. When you physically sell an asset like a stock, you've realized the capital gain. When you're holding the stock, and it has a value over its purchase price, but you're not selling it, you've got an unrealized gain, and you won't realize it until you sell.

In a perfect world, we'd all have capital gains. But no one¿s that smart or lucky. When the value of an asset at sale is below what you've paid for it, it's called a capital loss. The good news is that the government lets you count that loss against any gains you've had, lowering the taxes you pay. In fact, many people who sell a stock that has risen far over their purchase price tend to sell some stinkers, too, at the same time for the tax benefit. This is known as a capital-loss offset.

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Thursday, July 31, 2008

FDA Finds Salmonella Strain at Second Mexican Farm

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The salmonella strain linked to a nationwide outbreak has been found in irrigation water and in a sample from a batch of serrano peppers at a Mexican farm, federal health officials said.

Dr. David Acheson, the Food and Drug Administration's food safety chief, called the finding a key breakthrough in the case, as did another health official.

"We have a smoking gun, it appears," said Dr. Lonnie King on Wednesday, who directs the center for foodborne illnesses at the Centers for Disease Control and Prevention.

Acheson said the farm is in Nuevo Leon, Mexico. Previously, the FDA had traced a contaminated jalapeno pepper to a farm in the Mexican state of Tamaulipas. Both farms shipped through a packing facility in Nuevo Leon, raising the possibility that contamination could have occurred there.

The FDA advised consumers to avoid raw serrano peppers from Mexico, in addition to raw jalapeno peppers from Mexico, and any foods that contain them.

In a statement Wednesday, Mexico's Agriculture Department said it "rejects" the FDA's conclusion that the source of the salmonella outbreak had been located in the Mexican farm's irrigation water.

"The farm unit in question ended its harvest more than a month ago, so the sample they say they have lacks scientific validity" because the sample "was taken recently from a tank holding rain water that was not used in production," the statement said.

"The government reiterates its call for the FDA to use information responsibly and, above all, to base it on scientific evidence," the statement concluded.

Acheson and other officials were grilled at a congressional hearing about why the investigation originally focused on tomatoes. Industry representatives complained that they have lost more than $300 million and had to dump tons of perfectly good tomatoes they could not sell because of government warnings. The probe was slowed even more because FDA investigators were unfamiliar with the workings of the tomato industry and were reluctant to share information, they said.

"For weeks and weeks, investigators were on the trail of the wrong product," Thomas Stenzel, president of the United Fresh Produce Assn., told the House Agriculture Committee.

But federal officials insisted that tomatoes still cannot be ruled out and that it is quite possible the outbreak was caused by several different kinds of contaminated produce.

"I don't think we can say that (tomatoes) were needlessly dumped," Acheson told reporters after the hearing. "The early part of the investigation clearly implicated tomatoes."

The outbreak has sickened more than 1,300 people since April.

Tomatoes had been the prime suspect in the nationwide outbreak for weeks. But last week, the FDA said only jalapeno peppers grown in Mexico were currently implicated in the nationwide salmonella outbreak. The FDA said then it had found the same strain of salmonella responsible for the outbreak on a single Mexican-grown jalapeno in a south Texas produce warehouse. The agency explained that any contaminated tomatoes would be out of the food supply chain by now.

For now, the focus of the investigation is on the two farms in Mexico, which Acheson said are quite far from each other.

The Tamaulipas farm also grew tomatoes and peppers, said Acheson. But the tainted pepper traced to that farm was found at a warehouse facility in McAllen, Texas, raising the possibility it could have been contaminated along the way. Acheson said samples have been taken from the Tamaulipas farm, and lab results are pending.

The Nuevo Leon farm did not grow tomatoes.

Lawmakers are considering a range of reforms to prevent future outbreaks and speed their investigation. These include improving communication between investigators and the industry, imposing standards for good agricultural practices and improving traceability.

"You could describe our current food safety system as 'outbreak roulette,'" said Rep. Dennis Cardoza, D-Calif., chairman of the subcommittee holding the hearing. "One spin of the outbreak wheel, and your industry may be bankrupt, your loved ones sickened."