Tax Rates for Capital Gain and Dividends
What are Capital Gains?
The internal revenue service taxes different kinds of income at different rates. Capital gains are as profits from the sale of capital assets, such as stock, a business asset, a parcel of land, or a owrk of art. A capital gain is realised when a capital asset is sold at a price at a price higher than its basis. The basis of a capital asset is the purchase price, plus commisision and the cost of improvements less depreciation. A capital loss occurs when an asset is sold for less than its basis.
How Capital Gains Taxed
Capital gains are generally taxed at different rates than your wages and salaries. How much these capital gains are taxed dependent on how long you held the asset before selling.What is short-term capital gains tax?
Short-term capital gains are profits from the sale of assets held for one year or less. The short-term capital gains are taxed at your ordinary income tax rate, depending on the taxable income level.
What is long-term capital gains?
Long-term capital gains are profits from the sale of assets held more than one year. They are generally lower than short-term capital gains tax rates. The long-term capital gains tax rate is 0%, 15% or 20% depending on your taxable income and filing status. Taxpayers with modified gross income above a certain threshold are subject to an additional 3.8% net investment income tax (NIIT)Different types taxed at different rate
Capital gains tax rates
3.8% surtax on the net investment income
some taxpayer may owe additional 3.8% surtax on the net investment income that applies to which is smaller: your net investment income or the amount by which your modified adjusted gross income exceeds the amount listed below.
| Tax Rate | Single | MFJ or QW | HH | MFS | |
| 3.80% | 200,000+ | 250,000+ | 200,000+ | 125,000+ |
Capital Gain Tax Calculator
Not only you can take advantage of the low tax rate to hold capital assets for a year or longer, you can also have choices when ever possible recognize gains or losses. You can use capital losses to offset capital gains. If your losses exceed your capital gains, you can deduct the net loss on your tax return, up to $3000 per year ($1,500 for those married filing separately). Use our capital gain tax estimator to calculate your gains and losses for investments to figure out your tax.
