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
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
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%.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson
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%.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005