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Filling Taxes with Installment Sales

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From Quick Guide: Mutual Funds Help

Summary: Trying to file your business taxes? Learn how to file taxes with installment sales in this free video clip about small business tax tips.

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By Tom Choisnet
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Tom Choisnet was born, raised, and educated in San Bernardino, California where he has his practice today. He has been in self-employed tax practice for over 40 years and he has been...read more

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Video Transcript

"Hi, I'm Tom Choisnet, enrolled agent. I wanted to put a section in here about the sale of mutual fund shares. Too often people over report the gain on the sale of mutual fund because quite often they buy a round figure amount from a relative that might be in the mutual fund business, usually five, ten, twenty thousand dollars. When they go to sell they'll be reporting gains based on that ten thousand dollars, that's not correct because the dividends that have been paid and the capital gains that have been paid generally are use to buy more shares and they increase the basis in your holding. There's several ways to do this. You can use an average cost per share by calling the mutual fund company and finding out what that is or you can use a first in first out method and usually that results in a higher gain. We don't see that too often but with a declining market, it might be equitable."

eHow Article: Filling Taxes with Installment Sales

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