Capital Gains Tax Rates - Earn More? Pay More!

Know The Rates - Pay As Much As You Should!

July 27, 2004
Bogdan Voicu

Capital gains tax is a tax charged on capital gains, which is the difference between the price of sale and the price of purchase (including improvements). The tax to be paid is calculated using the Capital Gains Tax Rates. The Federal Government provides these rates according to everyone's annual income.

The capital gains tax rate has five possible values: 5%, 10%, 15%, 25% and 28%. This tax is influenced by the following elements: annual income, the time the asset or investment has been held and the type of the asset.

There are six "tax brackets" for the annual income that are used to calculate the percentage of income that must be paid as tax.

The income tax rates are:

  • 10%: $2,651 - $9,700
  • 15%: $9,701 - $30,800
  • 25%: $30,801 - $68,500
  • 28%: $68,501 - $148,700
  • 33%: $148,701 - $321,200
  • 35%: $321,201 and up

The CGT is a progressive tax, also known as graduated tax. This means that the tax is larger for those with larger incomes. The capital gains tax is, that way, calculated at "the last dollar you earn" (marginal tax). It means that the final rate is actually lower than the maximum one you should pay.

Still, the capital gains tax is influenced by the period the asset has been held. The idea behind CGT is to make long time investments. This means that if you sell an asset earlier than a year since the purchase has been done, you will pay higher taxes. Actually, if you sell after a year, you will have a decrease of approximately 5%.

Another element that influences the capital gains tax is the type of the asset - investment, collectible or real estate. Collectible investments are subject of an automatic 28% CGT rate.


Get Asset Protection Help For Free.

Sign up for free helpful asset protection tips from our legal research team.
I understand that these emails *may* contain some commercial messages.
I understand that my email will never be sold, distributed or given to any 3rd party.

  Asset Protection
  Limited Partnerships
  Limited Liability Company
  Nevada Corporation
  Living Trust
  Last Will And Testament
  Capital Gains Tax
 Asset Protection Articles  Contact Us





Privacy Notice: We will collect no personal information about you when you visit its website unless you choose to provide that information. The only information we automatically collects is the visitor's Internet domain and Internet Protocol address, the type of browser and operating system used to access the site, the file visited and the time spent in each file, and the time and date of the visit.