Long Term Capital Gains for US exchange based stock trades

POSTED BY sam mehta ON January 20, 2011 6:48 pm COMMENTS (3)

Hi

2 questions:

a) for shares purchased and sold on a US stock exchange – does one get the indexation benefit on long term capital gains? LTCG on such transactions is not tax free
b) if one can claim indexation benefit, then what happens if applying indexation actually results in a loss? For example, if I bought a stock for $5 in 2002 and sold for $6 in 2010, I have made a long term gain of $1 but with indexation it is actually going to be a loss since the purchase price with indexation is actually around $8.3

Any ideas?

Thanks

3 replies on this article “Long Term Capital Gains for US exchange based stock trades”

  1. sam mehta says:
    January 21, 2011 at 6:30 am

    Thanks for the link Gaurav. The indexation benefit is not available for US citizens filing taxes in US. However, this may not be applicable for Indian residents trading on US exchanges – the article does not say anything about it. Lets hope there is some other response too to validate what you think.

    Reply
  2. Gaurav says:
    January 20, 2011 at 8:18 pm

    AFAIK there is no indexation benefit on LTCG for US stock market transactions.

    Reply
    1. Gaurav says:
      January 20, 2011 at 8:23 pm

      http://en.wikipedia.org/wiki/Capital_gains_tax_in_the_United_States#No_offset_for_gains_due_to_inflation

      Reply

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