East Bay Business Daily

2006 tax filing - capital gain reported as short term instead of long term?

In 2006 I had $10,000 in long term capital gains, but it was reported as a short term capital gain. My federal taxes ended up being in the area of $1200. Had the capital gain been reported correctly, what would the difference be? Is there a way to fix this mistake?

Public Comments

1. Don't know. The difference is often 10% in the tax rate. Update the schedule D, be prepared to show you owned the stock for more than a day, attach it to a filled out 1040X and mail it in before 3 years are up.
2. Without knowing your tax bracket, there's no way to tell whan the difference would be. But if you're in a 25% tax bracket, you'd have paid 25% instead of the 15% long term capital gains rate, or around an extra $1000. Definitely worth amending your return.
3. Im not sure of this, but believe that you pay less tax on long term (over a year) capital gains. people have bashed me for this, but if you buy turbo tax it will ask you about this and it becomes a no brainer.... guys YOU really can do your own taxes by using the software. you dont have to pay anyone to do them for you.( well, you do have to buy the software).
4. Prepare your tax return using long term capital gain and find out your tax on the return. If there is a difference, then you will need to file 1040X to get refund.