Good afternoon, Misspag, and thank you for joining us!
You asked about how long term capital gains work.
Long-term capital gains refer to the sale of an asset that has been owned for over a year, and it is subject to capital gains tax rates. The tax rate for long-term gains are taxed at favorable rates of 0%, 15% or 20%, based on the individual's income and filing status.
To see where you fall please see below:
The long-term capital gains tax rates for 2024, based on filing status and taxable income, are as follows:
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For single taxpayers:
- 0% for taxable income up to $47,025
- 15% for taxable income between $47,026 and $518,900
- 20% for taxable income over $518,900
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For head of household taxpayers:
- 0% for taxable income up to $63,000
- 15% for taxable income between $63,001 and $551,350
- 20% for taxable income over $551,350
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For married taxpayers filing jointly:
- 0% for taxable income up to $94,050
- 15% for taxable income between $94,051 and $583,750
- 20% for taxable income over $583,750
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For married taxpayers filing separately:
- 0% for taxable income up to $47,025
- 15% for taxable income between $47,025 and $291,850
- 20% for taxable income over $291,850
Keep in mind that there are sometimes excptions to the special long term rates.
- Collectible assets, such as antiques, fine art, coins, and valuable vintages of wine, are subject to a 28% long-term capital gains tax rate, regardless of how long you've owned the item.
- Individuals, estates, and trusts who meet a certain income threshold and have significant capital gains from investment, interest, and dividend income may also be subject to the Net Investment Income Tax (NIIT). This 3.8% surtax is applied to specific investment sales. Typically, the NIIT applies to individuals with high incomes.
For additional information on how to figure capital gains please use the following links:
Please feel free to reach backout with any additional questions or concerns you might have!
Have a great rest of your day!
Terri Lynn, EA
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Terri Lynn
