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 ?
Technical Considerations to Permit an Informed Decision on Capital Gains Taxation of Offshore Indirect Transfers
Unlike Cunningham and Engelhardt (2008), Shan (2011), and Farnham (2006) who focus on the "lock-in" effect of capital gains taxation prior to TRA97 on mobility, we focus on another lock-in created by capital taxation--the impact on housing consumption.
Capital gains taxation has caused complexities and distortions throughout the history of the income tax.
For an average-rate taxpayer, there is a slight reduction of 1 percent in capital gains taxation from collective life insurance plans, while at the other extreme, capital gains from the corporate share's disposal (N = 5) show an increase near 13 percent.
Somewhere between this Identity extreme and the more evangelical mainstream, white theological supremacy closets itself in white cultural normativity, exemplified by a group like the Promise-Keepers which claims for itself an anti-racist personal intention even while many of its leaders and supporters work for rollbacks of affirmative action, cutbacks in capital gains taxation, an end to minority-based political districting, the abolition of welfare, the privatization of prisons, etc.
Finally, recent discussions of reform of capital gains taxation are to reduce the rate, shorten the holding period, or eliminate the tax.
The next section describes the evolution of UK capital gains taxation and assesses its impact on tax related explanation of seasonality.
For instance, Allen Sinai, chief global economist at Lehman Brothers, has estimated that a reduction in capital gains taxation would raise real and nominal gross domestic product by increasing capital spending and capital formation and, thereby, boost future government revenues.
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.
There can be no growth without incentives, like a temporary reduction in the VAT rate to 5 per cent for transactions relating to construction projects and the reduction of capital gains taxation," he said.
Thus, there may be capital growth in equities inside the policy that, in other situations involving personal ownership of the equity, would have created long- or short-term capital gains subject to capital gains taxation.
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.