What's the tax rate on capital gains income?
Capital gains tax rates vary, depending on these:
- Type of property
- Holding period of the property
- Your ordinary income tax bracket
Here’s how the property and your tax bracket influence the capital gains tax rate:
- Capital gains on property held for one year or less is taxed as ordinary income using your regular tax rate. So, the rate can range from 0% to 35%.
- Capital gains on property held for longer than one year are taxed at either 0% or 15%. Long-term capital gains are taxed at 0% for taxpayers in the regular tax brackets of 10% or 15%. Long-term capital gains are taxed at 15% for taxpayers in tax brackets higher than 15%.
- Capital gains on collectible property, like paintings or stamps, are taxed at a rate of 28%.
- Capital gains on certain business-use real property are taxed at a rate of 25%.