Capital Gains Tax

By information.com — Published September 18, 2017

Capital Gains Tax

The explanation on Capital Gains Tax is a lot similar to its term and name. This is a tax that is enforced by the United States government on any capital gains (profits) made by an investor. In most cases, this profit is realized when an investor sells an asset such as stocks for a higher price than what they acquired them for. Capital gains are paid only when the investor has made the actual sale of the asset. If there is a positive difference/gain in value on the asset, but the investor has not sold the asset, than the tax is not imposed.

Though it is taxes differently, capital gain is, for the most part, paid every year with an individual or corporation’s as part of their annual net income.

Capital Gains Taxes:

  • 15% low bracket
  • 20% high bracket

If you are a tax payer in the 10-15% tax bracket, you pay no tax on long term capital gains.

If you are a tax payer in the 25-34% tax bracket, you pay a 15% tax on long term capital gains.

If you are in the top 35% bracket, you pay 20% tax on long term capital gains.

 

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