Capital Gains Tax Rates

Capital Gains Tax Rates
Capital gains tax rates are determined by the type of investment asset and the holding period.

In additional to the federal capital gains tax rates, your capital gains will also be subject to state income taxes. Most states do not have separate capital gains tax rates. Instead, most state will tax your capital gains as ordinary income subject to the state income taxes rates.

Starting with 2008, there's a new zero percent tax rate on long-term capital gains. The zero percent rate applies to individuals who are in the 10% and 15% marginal tax brackets. The zero percent rate is scheduled to expire at the end of 2010, when capital gains rates will increase to at least 15%.

Capital Gains Tax Rates

Type of Capital Asset	Holding Period	Tax Rate
Short-term capital gains (STCG)	One year or less	Ordinary income tax rates up to 35%
Long-term capital gains (LTCG)	More than one year	5% for taxpayers in the 10% and 15% tax brackets (zero percent starting in 2008)
		15% for taxpayers in the 25%, 28%, 33%, and 35% tax brackets
Collectibles	One year or less	STCG tax rates up to 35%
Collectibles	More than one year	28%
Small Business Stock Gains (Section 1202)	More than five years	28% on the gain not excluded
Real Estate Main Home	One year or less	STCG
	More than one year	LTCG taxed at 5% or 15% after any exclusion amount

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