• Most accounts or notes receivable • Real estate and depreciable property used in the business
• Certain copyrights, creative works the business created, and government publications. The difference between the sales price and your basis (what you paid for it, plus certain improvements and expenses) determines your gain or loss. Individuals (Sole Proprietors, Partners, S Corp Shareholders) • Long-term capital gains (assets held more than one year) enjoy lower tax rates than regular income. • Short-term capital gains (assets held one year or less) are taxed at your ordinary federal income tax rates. Federal 2026 Long-Term Capital Gains Brackets Rate Single Married Filing Jointly Married Filing Separately 0% up to $49,450 up to $98,900 up to $49,450 15% $49,451–$545,500 $98,901–$613,700 $49,451–$306,850 20% over $545,500 over $613,700 over $306,850 Note : Net investment income may face an additional 3.8 percent tax for high earners. C Corporations • All capital gains are taxed at the corporate income tax rate (21 percent). There is no reduced rate for long-term gains. • C corporations can only deduct capital losses up to the amount of their capital gains. Net capital losses can be carried forward to offset future capital gains, but not other income. Minnesota Tax Treatment Minnesota does not have a separate capital gains tax—all capital gains (short- and long-term) are taxed as ordinary income using Minnesota individual or corporate rates.
Net Operating Loss Net Operating Loss (NOL): What It Means for Your Minnesota Business
If your deductible business expenses are more than your total income for the year, you may have a Net Operating Loss (NOL). An NOL lets you use this year's losses to reduce taxable income in future years, helping lower taxes when your business is profitable.
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