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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Saturday, September 06, 2008

Stocks In Focus For Monday

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MarketWatch

SAN FRANCISCO -- Monday will be a relatively quiet day as far as earnings go, but investors will have plenty to trade on as they mull over several major deals that are expected to take shape soon.

SanDisk (SNDK) shares are likely to see more action after Samsung Electronics (SSNLF) of Korea said it is considering an offer for the U.S. chipmaker. See full story

UST (UST) shares are expected to extend gains with Altria Group Inc. (MO) reportedly proposing to acquire the smokeless tobacco and wine maker for about $10 billion. Media reports say a deal could be finalized as early as Monday. See full story

Lehman Brothers (LEH) shares will continue to trade on news rather than fundamentals as it seeks to secure a much-needed capital injection, said Matthew Albrecht, a financials analyst at Standard & Poor's Equity Research. Lehman benefited on Friday from a media report that Blackstone Group (BX) and Kohlberg Kravis Roberts & Co. are separately looking to buy parts of Lehman's real estate and asset management units. See related story

The Treasury Department is close to finalizing a plan to help prop up Fannie Mae (FNM) and Freddie Mac (FRE) . An announcement could come as early as this weekend, according to reports.

Watch list

Black & Decker Corp. (BDK) named Stephen Reeves as chief financial officer. Reeves will succeed Michael Mangan who was named senior vice president of the corporation and president of the worldwide power tools and accessories business.

Continental Airlines Inc. (CAL) will start charging $15 for the first checked bag for certain customers who buy economy-class tickets. The fee will go into effect Oct. 7. Separately, the company said it named Zane Rowe as executive vice president and chief financial officer as of Aug. 31,

General Electric Co. (GE) said it may be facing a civil action from the Securities and Exchange Commission over how it accounted for derivatives in several of its segments, the company said in an SEC filing Friday. On Thursday, GE said it received a "Wells notice" from SEC staff recommending the agency bring a civil injunctive action against the company for possible violations of securities laws.

JetBlue Airways Corp. (JBLU) said August traffic rose 1.9% to 2.56 billion revenue passenger miles from last year. A revenue passenger mile equals one passenger flown one mile. August capacity rose 1.2% to 2.94 billion available seat miles, JetBlue said. Load factor, or the percentage of available seats filled with passengers, for August rose to 87.1% from 86.4% a year ago.

Parametric Technologies Corp. (PMTC) , a Massachusetts-based maker of computer-aided design and operational software, has hired investment bank Goldman Sachs Group Inc. (GS) and it's approaching bidders in an attempt to sell itself for $2 billion, the Financial Times reports, citing people with knowledge of the process. The newspaper adds that the process is still in early stages.