The federal income tax rate that applies to gains from the sale of stocks, mutual funds or other capital assets depends on how long you held the asset and your taxable income. Gains from the sale of capital assets that you held for at least one year, which are considered long-term capital gains, are taxed at either a 0%, 15% or 20% rate. [Read more...]
Nancy J. Winter, CPA – Capital Gains on Inherited Property
An inheritance is a windfall that can absolutely help someone's financial situation, but it can make your taxes tricky. If you inherit property or assets, as opposed to cash, you generally don’t owe taxes until you sell those assets. These capital gains taxes are then calculated using what’s known as a stepped-up cost basis. This means that you pay taxes only on appreciation that occurs after you inherit the property. Following are three main types of taxes that cover inheritances: [Read more...]
Nancy J. Winter, CPA – 2021 and 2022 Capital Gains Tax Rates
The federal income tax rate that applies to gains from the sale of stocks, mutual funds or other capital assets depends on how long you held the asset and your taxable income. Gains from the sale of capital assets that you held for at least one year, which are considered long-term capital gains, are taxed at either a 0%, 15% or 20% rate.
However, which one of those long-term capital gains rates applies to you depends on your taxable income. The higher your income, the higher the rate. Following are the capital gains taxable income thresholds for the 2021 tax year: [Read more...]
Nancy J. Winter, CPA – Understanding Capital Gains and Capital Losses
Almost everything you own and use for personal or investment purposes is a capital asset. Examples include a home, personal-use items like household furnishings, and stocks or bonds held as investments. When you sell a capital asset, the difference between the adjusted basis in the asset and the amount you realized from the sale is a capital gain or a capital loss. However, not all capital gains are treated equally. The tax rate can vary dramatically between short-term and long-term gains. [Read more...]
Nancy J. Winter, CPA – Year End Planning for Capital Gains and Losses
As an economic incentive for individuals to save and invest, gains from the sale of capital assets held for at least one year may be taxed at rates lower than ordinary income tax rates.