capital gains tax

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Capital gains tax

The tax levied on profits from the sale of capital assets. A long-term capital gain, which is achieved once an asset is held for at least 12 months, is taxed at a maximum rate of 20% (taxpayers in 28% tax bracket) and 10% (taxpayers in 15% tax bracket). Assets held for less than 12 months are taxed at regular income tax levels, and, since January 1, 2000, assets held for at least five years are taxed at 18% and 8%.

Capital Gains Tax

The tax paid on profits realized by selling a position held for longer than one year. For example, if someone buys a stock or bond and sells it five years later for more than what he/she paid, that person is assessed the capital gains tax. In the United States, capital gains taxes are lower than regular income taxes. This is because the government wishes to encourage long-term investment. It is important to note that the capital gains tax is only assessed on long-term capital gains, not on short-term capital gains. See also: Long-term capital loss.

capital gains tax

The tax applicable to gains realized from the sale of capital assets, including stocks and bonds. The capital gains tax rate and holding period requirements are periodically changed by Congress. A favorable tax rate is generally applied to realized gains on assets that are sold following a holding period of over one year. Realized capital gains on assets held a year or less do not generally receive favorable tax treatment.

Capital gains tax (CGT).

A capital gains tax is due on profits you realize on the sale of a capital asset, such as stock, bonds, or real estate.

Long-term gains, on assets you own more than a year, are taxed at a lower rate than ordinary income while short-term gains are taxed at your regular rate.

The long-term capital gains tax rates on most investments is 15% for anyone whose marginal federal tax rate is 25% or higher, and 5% for anyone whose marginal rate is 10% or 15%. There are some exceptions. For example, long-term gains on collectibles are taxed at 28%.

You are exempt from capital gains tax on profits of up to $250,000 on the sale of your primary home if you're single and up to $500,000 if you're married and file a joint return, provided you meet the requirements for this exemption.

capital gains tax

a TAX on the surplus obtained from the sale of an ASSET for more than was originally paid for it.

In the UK, CAPITAL GAINS tax for business assets is based (as at 2005/06) on a sliding scale, from 40% on gains from assets held for under one year to 10% on gains realised after 4 years. For persons, capital gains on ‘chargeable'assets (e.g. shares) up to £8,500 per year are exempt from tax; above this they are taxed at 40%.

capital gains tax

a TAX on the surplus obtained from the sale of an ASSET for more than was originally paid for it. In the UK, CAPITAL GAINS tax for business assets is based (as at 2005/06) on a sliding scale, falling from 40% on gains from assets held for under one year to 10% on gains realised after four years. For persons, capital gains on chargeable’ assets (e.g. shares) up to £8,500 per year are exempt from tax; above this they are taxed at 40%.
References in periodicals archive ?
Studies by Burman, Wallace, and Weiner (1996) and Hoyt and Rosenthal (1990, 1992) examine the impact of pre-TRA97 capital gains taxation on housing consumption.
In that study we show that the impact of capital gains taxation on stock values can be positive or negative depending on the correlation between the stock's returns and those of the overall portfolio.
Capital gains taxation has caused complexities and distortions throughout the history of the income tax.
This section first develops the model in the absence of capital gains taxation in order to illustrate clearly and simply the methodology and the main results.
A critical issue in the design of the capital gains tax is the extent to which capital gains taxation distorts trading behavior by taxable investors.
Securities houses also moved higher on a news report that the LDP's tax commission is eyeing easing the planned time period of a temporary reduction in the rate of capital gains taxation on stocks and extending the reduced 10% rate to all shareholdings.
We see key drivers of this including: the continued pressure on corporate managements to deliver greater focus to their business by divesting non-core assets; the catalytic effect on M&A of the proposed abolition of corporate capital gains taxation in Germany; and the increasing recognition by corporate vendors that private equity players can represent an attractive and responsible alternative to more traditional disposal routes.
The Internal Revenue Service Restructuring and Reform Act of 1998 made additional substantive changes and technical corrections to capital gains taxation, but did not address the issues of installment sales and Sec.
This rate remains at 25 percent, putting real estate at a disadvantage against other investments with a capital gains taxation top rate of 20 percent.
This act exempts trusts from corporate income and capital gains taxation, providing they invest primarily in specified assets, pay out most of their income to shareholders, and meet certain requirements regarding the dispersion of trust ownership.
But, drawing on our own earlier related papers on capital gains taxation (7), David F.
First, the Capital Gains Taxation Task Force is reconsidering STP 1, Taxation of Capital Gains (and the portions of STP 6 and 9 dealing with indexation of capital assets), with a view towards updating it, challenging its conclusions and establishing a current policy position for the AICPA.