When you acquire an asset for $100 and sell it for $120, the money you make from that sale is considered capital gains (which may be taxable).
Capital gains can be reduced by deducting the capital losses that occur when a taxable asset is sold for less than the original purchase price. The total of capital gains minus any capital losses is known as the "net capital gains." - Investopedia
At Passfolio, we provide monthly capital gains reports to make reporting taxes for your offshore investments easier - see an example below:
We’ve also partnered up with Douglas Gomes from Meu Contador to create a guide with key information about how to report taxes for your offshore investments*. You can access the complete guide here.
*Remember this information should not be considered legal or tax advice - please consult your lawyer or tax professional regarding your specific situation. Passfolio is only offered where it is legal and is not specifically directed to anyone in Brazil https://passfolio.us/legal
Exemption Limit: If you sold up to 35,000.00 BRL (thirty five thousand reais) of stock in a given month, you are exempt from taxation regardless of your profit. However, this does not apply to interest you may earn on your investments.
Exchange Rate Variation: If the money you used to invest abroad was earned in Brazil, you must calculate the difference between the purchase and sale price of your stock taking into account the exchange rate variation between when you purchased and sold your assets. However, if the money used to acquire assets abroad was earned in the US, you do not need to take into account the exchange rate and will pay tax only on the gain you obtained in the sale of the asset.
Keeping track of capital gains isn’t just important for tax purposes - it also helps you understand if you’ve been making or losing money from your investments. In fact, we suggestyou keep a spreadsheet with monthly documentation of your capital gains and capital losses in order to better understand how your investments are performing.
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¹ Please see our fractional shares disclosure.
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