The 2018 annual report of Bristol-Myers Squibb reveals that the company maintains a large investment in available-for-sale securities. Did the company's available-for-sale securities experience a gain or loss in value in 2018 and/or 2017, and if so, in what amount? How did the company account for these gains and/or losses? Were these gains (losses) taxable (tax deductible) in 2018 and/or 2017?

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Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.