Short-term capital gains are
gains on the sale of an investment (or other property) that you’ve owned for
one year or less. Long-term capital gains are on investments you’ve held for
more than a year.
For federal tax purposes, net
short-term capital gains are taxed as ordinary income. Net long-term capital
gains are “stacked” on top of your other income but are taxed at lower federal rates
depending on your income tax bracket:
10% & 15% income tax brackets -- 0% capital gains tax
25% to 35% brackets -- 15% capital gains tax
39.6% highest bracket
-- 20% capital gains tax
Be sure to also consider any
state taxes on your gains, if applicable.
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