capital gains tax rate chart

Capital Gains Tax Rate Chart - Take a Count on Your Gains…!!!!

August 4, 2004
Tomas Harnin

If you have any capital gains you need to tell that to IRS. It is very important to refer to the capital gains tax rate chart before submitting your details to the taxman. If someone has sold something called as a capital asset then he is taxed on the profit of the sale as an ordinary income tax. But if he had held that asset for a long time then he would be taxed at lower rates known as capital gains tax rate.

The tax rate chart on capital gains states different tax rates based on the basis of the tenure for which the capital assets was held by its owner. Short term capital gains are taxed on marginal rates which can be as high as 35% for 2003. But long term holdings of capital assets can let you keep much more of the total capital gains.

The rates table states below apply only if the net long term capital gain for the years exceeds the net short term capital loss. Also more than one rate may apply.

Maximum Capital Gain Rates

Rate - Applies To

28% - Gains on collectibles and small business stock.

25% - Gain on real property attributable to straight-line depreciation.

20% - Gains from property sold before May 6, 2003, not subject to 25% rate or 28% rate from capital assets held over one year.

18% - Gains from capital assets held over five years and acquired after 2000 (or property held over five years and for which the taxpayer made the Section 311 election on 2001 Schedule D). Does not apply until the 2008 tax year.

15% - Gain from property sold on or after May, 2003, to the extent taxable income is taxed at a rate over 15%.

14% - Effective rate on gain from small business stock eligible for the 50% exclusion.

10% - Gain from property sold before May 6, 003, and held five years or less to the extent taxable income is taxed at 10% or 15%.

8% - Gain from property sold before May, 2003, if held over five years to the extent taxable income is taxed at 10% or 15%. (See the Qualified 5-Year Gain Worksheet in the Schedule D instructions.)

5% - Gain from property sold on or after May6, 2003, to the extent taxable income is taxed at 10% or 15%

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