Quote:
Originally Posted by RichieLion
You're misunderstanding the question. YES; if the money invested was originally INCOME it was taxed before it was invested. Then that investment can generate capital gains which is taxable again.
This is what was meant.
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Nope. Capital gains are ADDITIONAL income to any previous taxed income. Let's say I earned $1000 taxable dollars in 2012. I invest the remaining $700 in Bain Capital in 2012, which earns, as expected, $7,000,000. My capital gains are $6,999,300. I pay 15% on that figure only, not on the original $700 when I cash out in 2013.