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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, May 15, 2008
Cash-strapped Drinkers Downgrade to Economy Beers
Associated Press
MILWAUKEE--Cash-strapped drinkers are starting to trade down to economy beers, the chief executive of Miller Brewing Co. said Thursday.
The Milwaukee-based brewer saw some shift between higher-priced, premium beers and economy beers such as Miller High Life and Milwaukee's Best starting in January, Tom Long told reporters on a conference call.
"We think it's primarily driven by decline of disposable income and pocket money that American consumers are feeling right now," he said.
Long said the volume of beers sold remains stable, but the company expects to sell more lower-priced beers this year if gas prices continue to rise.
Americans also are spending less in bars and restaurants, and Long said Miller is seeing declines in sales to those businesses.
Miller's parent, London-based SABMiller PLC, announced Thursday its full-year profits rose 22.7% and the growth rate for lager volumes doubled.
In the U.S., Miller's revenue rose 4.8% to $5.1 billion. Earnings before interest, taxes and amoritization rose 27% to $477 million, though that includes a gain of $33 million from a settlement of a dispute.
Sales of flagship brand Miller Lite was up 1.1%, as were sales of Miller High Life. That brand's performance, on the strength of its humorous ad campaign urging people to "Take Back The High Life" reversed a three-year decline.
But other brands didn't fare so well. Miller Geniune Draft's sales were down 10.6%, as the domestic premium brand continued to struggle. Economy brew Milwaukee's Best also saw declines.
SABMiller did not break out fourth-quarter results. The brewer, the world's third-largest, said overall revenue was up 15% to $21.4 billion.
Long didn't offer any new information about the proposed joint venture between Miller and Molson Coors Brewing Co. That awaits governmental approval.
Miller, the nation's second biggest brewer, and Coors, the third biggest, say the pairing -- to be called MillerCoors -- will help them better compete against industry leader Anheuser-Busch Cos. Inc., the maker of Budweiser.
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