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 ?
Of particular interest is our finding that valuations for stocks whose returns are negatively correlated with market returns generally are increasing in capital gains tax rates.
To the extent the capital gains tax cut resulted in a fundamental shift in the relation between stock returns and the explanatory variables in their return models, including all 106 weeks in a pooled cross-sectional test may not be appropriate.
In Clark,[7] the District Court allowed a reduction for potential capital gains tax in determining the gift tax value of shares of stock in a closely held corporation.
By analyzing the effects of other provisions contained in the 1990 tax act, the authors show that the effective maximum long-term capital gains tax rate is significantly higher than the nominal maximum rate of 28% codified in the 1990 tax act.
Federal Finance Minister Dr Abdul Hafeez Shaikh had announced the change in the system of the collection of capital gains tax in early this year.
Speaking at the financial committee of the Legislative Yuan, Christina Liu noted that the nation's capital gains tax is actually distributed under a number of tax items at present.
6million from his pounds 30m earnings by paying capital gains tax.
Under the current rules, people facing a capital gains tax bill after selling other assets can defer paying the money if they buy a holiday property, until after they sell it.
Despite moves to reduce the current capital gains tax rate from as high as 40% to a flat rate of just 18%, many second home owners could still end up paying more tax, according to accountants Pricewaterhouse Coopers.
From April the tax relief which allowed small business owners to sell up and pay 10% CGT on the profit will be abolished: instead there will be a flat rate of capital gains tax of 18%.
Imagine Canada, an organization that advocates for the nonprofit sector, has come up with a surprising proposal in the midst of this election campaign--to eliminate the capital gains tax on publicly traded securities donated to registered charities.
Since May 1997, homeowners selling their home have been allowed to exclude any capital gains tax, provided they meet the following requirements: