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Capital Gains Tax: How It Works, Rates and Calculator
Capital gains tax is a crucial consideration for investors, levied on the profit from the sale of assets like stocks or real estate. The tax rate varies based on the asset’s holding period and the taxpayer’s income level, with distinct rates for short-term and long-term gains. Understanding these nuances can significantly impact investment strategies and financial outcomes. This article from NerdWallet does a great job of explaining Capital Gains, rates and there is a calculator as well to help you calculate your 2023 Capital Gains.
Source: Nerdwallet | Repost REDonica 3/20/2024 –
If you’re thinking of investing or selling a stock, it’s important to familiarize yourself with the term “capital gains tax” before you begin.
The profit you make from the sale of capital assets, such as stock, houses, cars or other types of investments, is considered income in the eyes of the IRS. How it gets taxed depends on a few factors, including your income.
What is capital gains tax?
A capital gains tax is a tax on the profit from the sale of an asset. How your capital gain is taxed depends on your filing status, taxable income and how long you owned the asset before selling it. Capital gains taxes are progressive, similar to income taxes.
The capital gains tax rate is 0%, 15% or 20% on most assets held for longer than a year. Capital gains taxes on assets held for a year or less are taxed according to ordinary income tax brackets: 10%, 12%, 22%, 24%, 32%, 35% or 37%.
Also – Remember that the deadline for filing your taxes this year is April 15, 2024.
Bob Donica
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