 Here we are in our example Form 1040 populated with LASERT tax softwares. You don't need tax software to follow along, but it's a great tool to run scenarios with. You can also get access to the Form 1040 related forms and schedules at the IRS website, irs.gov, irs.gov, starting point, single file, or we've got then no dependence, 100,000 W2 income, 12,950 for the standard deduction, getting us to that 87,050, mirroring that over here on our Excel worksheet in a formula. Format 100,000, 12,950, there's the 87,050 page two, we're going to rely on the tax software to do the calculation, which is important when we talk now about the capital gains, because we could have a scenario then where we have favorable tax rates if we're talking about long term capital gains currently, that's at 14774. Then we said there's 15,000 withholdings getting us down to the 226 on the bottom line. There's the 226. Okay, we're going to be talking about the capital gains now. So if I go back on up to page one, now we might dive into capital gains in more depth in a future presentation. Right now, we just want to get a general idea that the capital gains, of course, are another type of income that will be flowing into page one of the form 1040, often populating or going through the other form of the schedule D. So for most people, you'll get like a 1099 something that will look something like this, it'll have a B on it. So if you're a financial institution you do business with, you might then have interest from them dividends from them, which will be a 1099 interest or 1099 div. And then also they might give you a 1099 B which might not look exactly like this, but we'll have the key fields hopefully, in order to do the population that being the proceeds, what you got, they should have that for sure. And the date that you sold it, they should have that for sure. And then hopefully they can estimate or get or provide the date that was acquired, which is the more difficult field for them to to populate, because you might have the stock before you were doing business with that particular institution. And then the cost is also another area of complexity, because hopefully they can provide you that but you might have had the stock before you dealt with them. And there might have been various stock splits, you might have inherited the stock and all this complicates what the value or cost of the stock would be. So that's the thing that we got to be aware of, that we can run into problems with. First, of all, also note that you might have like a summary from your financial institution that will give you the total proceeds. And then you might have to go to the detail to get more information about all the sales that were taking place. Also realize that if you're in a situation for most clients, their investments are under the umbrella of an IRA or a 401k, even though they're invested in stocks, for example. And that would mean that when they when they actually are in retirement, then they're going to get then they're going to get the the 1099 are most likely and you'll have to pay ordinary income because you got a tax benefit when you put the money in to that type of retirement account, you'll have the 1099 be typically from stocks that were sold possibly from like a day trader type of situation, or someone that it has investments, which would be good to have outside of the umbrella of an IRA for like the short term needs or if they've maxed out what they can put into an IRA or 401k plan and then when you sell those items, that's when you would expect to be receiving something like a 1099 be we could have gains we could have losses related to the sale as well. So let's then populate this over here. We're going to say, all right, there was a sale that took place. We've got this 1099 be so I'm going to go in and say that we have income and let's say it was an income from schedule D and then I'm going to populate something like now the quantity would be how much we sold and the description we might say shares of whatever stock and then the date acquired. Now note if they give you if it was one or two stocks sold and you have the exact date acquired then that's great. But if you have multiple sales of stocks then you might have to go into the detail and put each of those transactions or summarize them possibly. The major thing that we need to do when we summarize them if that's the tactic we take is to make sure that we're categorizing long term versus short term. So let's take like one stock for example first let's say the the acquired date let's say we know what the acquired date is because they gave it on the 1099 be or the sub schedules related to it is 0101 let's say 00 okay that's 0101 00 so January 1st 2020. So that's clearly over a year old therefore it's going to be long term and possibly subject to the more favorable capital gain rates. I'm going to say we sold it we would have had to sold it sometime in 2022 of course I'll just say it's in the middle of 2022. The sales price let's say was 1000 but the cost what we purchased it for the difficult calculation if this was stocks that were old and had splits and whatnot that's where the issues could come in on the cost and on the date acquired which may require some estimates sometimes right so I'm going to say let's say the cost was was 300 and so there's a gain that was applied and so on and so forth let's do that for the example jump into the tax forms we now have a schedule D that has been populated capital gains and losses so if I scroll through the schedule D I don't have anything populated in the short term because it wasn't a short term calculation it's a long term calculation down here where we have the 1000 minus the 300 that means the gain is 700 dollars and there's the 700 that's going to be pulling into the 1040 so here's the form 1040 and then we've got the gain that's pulled in right there now if I mirror this on the software over here I can mirror this in our calculation but remember that we've got this other issue with the tax calculation down here because we're not taxed at ordinary income because it was a long term capital gain so let's go back on over and say okay uh let's add the schedule D do I have a schedule D no so I'm going to say add I'm going to pull this to the right I'm going to do this fairly quickly because it's not an excel course but I'm just going to make another sheet that will mirror the schedule D I'm going to put my cursor on the whole sheet the triangle format it I like to make it currency bracketed negatives no dollar sign let's remove the decimals I'm going to make it larger and I'm going to call this an A1 let's say it's a schedule my fingers aren't on the rent schedule D cap capital capital gains boom and then I'm going to make this one a little bit larger and let's put it home tab font group we're going to make it black and white for the header let's do that I'm going to make the whole thing in bolden so you can see it a little bit more and then we're going to have a short term short term and then I'll have long term maybe down below long term something like that and I'm going to leave a bit of space for both of those and make this black and white and let's make this black and white I'm going to leave I'm going to make this like blue or something so let's go blue and bordered blue and bordered and then I'm going to say this was the sales price and this is going to be the cost and let's make another one and this is going to be the gain or loss gain or loss and I'm going to format this over here let's center this like so let's do the same thing down below copying this and paste it here I'll put some blue and bordered blue bordered and I'll say this is the total short term term capital gains I'm going to sum up the outer column and then this is going to be the total long term capital gains I'm going to sum up on the outside and then we'll say this is the total capital gains or losses I should be saying but I'm going to say gains for now boom let's spell check it review and spell checky boom perfection all right