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Capital Gains Tax
Rates
Capital Gains Taxes
& Rates
A capital gains tax is a tax charged on profit realized on the sale of a non-inventory asset that was
sold
for
more
than
it's
purchase price. The most common capital gains are realized from the sale of stocks, bonds, precious metals and property.
Capital
gains
tax
rates
are
determined
by
the
type
of
investment
asset
and
the
length
of
time
held.
In
additional
to
the
federal
capital
gains
tax
rates,
your
capital
gains
will
also
be
subject
to
state
income
taxes.
Most
states
will
tax
your
capital
gains
as
ordinary
income
subject
to
the
state
income
taxes
rates
since
many
do
not
have
separate
state
capital
gains
tax
rates.
Capital
Gains
Tax
Rates
Type
of
Capital,
Asset
Holding
Period,
and
Tax
Rate
Federal
Capital
Gains
Tax
Rates
| Tax Bracket |
Capital Gain Tax Rate |
| Short Term |
Long Term |
| 10% |
10% |
0% |
| 15% |
15% |
| 25% |
25% |
15% |
| 28% |
28% |
| 33% |
33% |
| 35% |
35% |
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- Short-term capital gains (STCG) One year or less Ordinary income tax rates up to 35%
- Long-term capital gains (LTCG) More than one year 0% for taxpayers in the 10% and 15% tax brackets.
15% for taxpayers in the 25%, 28%, 33%, and 35% tax brackets
- Collectibles One year or less STCG tax rates up to 35%
- Collectibles More than one year 28%
- Small Business Stock Gains (Section 1202) More than five years 28% on the gain not excluded
- Real Estate Main Home One year or less STCG
More than one year LTCG taxed at 5% or 15% after any exclusion amount
Just
about everything you own and use for personal or investment purposes is a capital asset. Examples are your home
and
property, household furnishings,
mutual
funds,
stocks
and bonds. When you sell a capital asset, the difference between the amount you sell it for and your
original
purchase
price is
the capital gain, or
in
the
event
the
value
went
down
it
is a capital loss.
A new zero percent tax rate began in 2010 - on long-term capital gains, and applies to individuals who are in the 10% and 15% marginal tax brackets. This zero percent rate expires at the end of 2011, when capital gains rates are scheduled to increase to at least 15%,
unless
congress
renews
the
0%.
Capital gains rates are designed to encourage consumers to make long-term investments.
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