Capital Gains Tax Rate: Long Term & Short Term
Long Term & Short Term Capital Gains Tax Rate
Your capital gains tax rate will be figured out depending on the holding period and the type of investment asset. You will be taxed federally on your capital gains and may also be subject to being taxed by your state as well.
This schedule displays the current long term and short term federal capital gains tax rates:
Long Term Capital Gains Tax 2010 Held Longer Than One Year
¢5% for taxpayers in the 10% & 15% bracket,
¢15% if you are in the 25%, 28%, 33%, & 35% bracket
¢Real Estate longer than one year 5% or 15% after any exclusion amount
¢Collectibles longer than one year... 28%
¢Collectibles longer than five years... 28%
¢Small Business Stock Gains at least five year... 28%
For some in the low bracket tax category, the long term capital gains tax rate may be zero, but this is subject to qualifying. As always, tax can be tricky and subject to a few stipulations. The long term capital gains tax rate of course will change after 2010.
Short Term Capital Gains Tax 2010 Held Less Than One Year
¢Standard income tax rates up to 35%
Short term capital gains are taxed on the investor's ordinary income tax rate. Short term capital gains are held by the investor for less than one year.
In 2008 a change occured for those in the 10% or 15% tax bracket. To qualify for this capital gains tax break your income must be below $32,550.00 if you are filing single and less than $65,100.00 if you are married. The new tax rate will be zero for long term capital gains and short term capital gains. After 2010, dividends will be taxed at the taxpayer's ordinary tax rate.
Long term capital gains are taxed at a lower rate than what your regular income will be taxed at. Depending on your income for that tax year you may be pushed in to a higher tax bracket if you received capital gains. This could result in a combination of rates for your income and capital gains.
Tax Deductible Business Expenses
With so many possible tax scenarios, you may worry a few things will slip through the cracks. That won't happen with TurboTax Online. They will help you find every tax deduction you deserveand even search your return for missed deductionsso you don't overlook any opportunity to save.
TurboTax also has more articles in their support section to help you understand everything about long term capital gains tax rates and short term capital gains tax rates.
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