Capital Gains Tax Rate
Gains Tax Rate
A capital gain
is a profit resulting from investments into a capital asset, such as
stocks, bonds or real estate, which exceed the purchase price.
It is basically the difference between a higher selling price
and a lower purchase price with the result being a financial gain
for the investor.
In the America,
individuals and businesses are required to pay income tax on the
total net capital gains the same as they do on other types of
income. Capital gains are generally taxed at a preferential rate in
comparison to ordinary income. This is to encourage investors to contribute to capital
investments and to support new businesses. The tax amount is dependent upon the individual’s tax rate
along with the period of time the investment was owned before being
sold. Long term gains are
for assets owned for over a year.
Capital gains tax (CGT).
The profits you receive as a result of selling a capital asset
will result in a tax for capital gains.
Gains of a long term type, the gain on assets you have ownership
for more than a year for are taxed at a less rate than regular
income but short-term gains
are still taxed at your standard rate.
The long-term capital
gains tax rates are usually 15% for anyone whose l federal tax rate
is 25% or higher and 5% for anyone whose tax rate is 10% or 15%. A
few exceptions do exist. Such as long-term gains on collectibles
will be taxed at 28%.
Gains on the sale of
your primary home up to $250,000 are typically exempt from capital
gains tax for those filing a single return and if you are filing a
joint return this can be up to $500,000 as long as you meet the
exemption requirements are met.